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London Stock Exchange-listed Rexam Plc and Hindustan Tin Works Ltd will jointly invest Rs 220 crore over two years in expanding their beverage can manufacturing facility to cater to the fast growing Indian market.
A new manufacturing line at the existing facility at Taloja near Mumbai will increase the total capacity to 850 million cans per year from the present 300 million cans. Production from the new line is slated to start from the last quarter of 2012, both companies said in a statement.
The 85:15 joint venture between Rexam and Hindustan Tin had an annual turnover of around Rs 90 crore last year, said Mr Atit Bhatia, Senior Vice-President at Hindustan Tin. The JV serves customers such as Kingfisher and SAB Miller, among others, in the Indian market. The board of Hindustan Tin will approve its share of investment in joint venture expansion on August 12, Mr Bhatia said.
Shares of Hindustan Tin gained 3.6 per cent on the BSE to close at Rs 89.30 on Wednesday.
“The investment is consistent with our emerging market strategy. The country has enjoyed considerable growth over the last decade, with rising incomes and a young middle class, and this trend is expected to continue,” said Mr Graham Chipchase, Chief Executive, Rexam.
The beverage can market in India is witnessing an annual growth of around 30 per cent.
“The new capacity will help further expand the Indian market,” Mr Bhatia said, adding that rising incomes and a young middle class were driving the beverage can consumption.
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