AGI glaspac to invest up to ₹130 crore in technology upgrade

AGI glaspac, a leading container glass maker, will invest up to ₹130 crore in technology upgrades that will see its capability to produce lighter bottles and reuse glass, get a big shot in the arm.

The Hyderabad-based ₹1,300-crore turnover company will obtain the latest technology called NNPB from Europe for producing light weight bottles. The technology helps reduce bottle weight by a third without compromising on the quality of performance.

“We have production capability and will need about ₹100 crore investment to get the special technology and harness it for manufacturing products that will mostly be exported,” Rajesh K Khosla, President & CEO of the company told BusinessLine in an interview.

AGI glaspac, the Packaging Products Division of HSIL Ltd, is the first Indian company to export light bottles to beer majors in Europe. It will expand the market to North America and Africa in a big way. Demand for wine bottles, too, is high. The target is to earn up to 10 per cent of revenues from exports, he said.

The other major investment will be in setting up ‘Cullet Systems’. The company is getting the sorting system from an Austrian firm. It helps in separating caps, wrappers, glass, etc, systematically, paving the way for an efficient reuse of collected bottles.

The first unit with funding of ₹15 crore will come up in the Bhongir manufacturing plant, about 50 km from Hyderabad. The second with the same investment will be set up in the Hyderabad production unit next year, Khosla said. The recycling and reuse in glass industry is just 40 per cent compared to 70-75 per cent in Europe. Its usage is limited to liquor, beverages, pharma and FMCG, now. AGI wants to push up this percentage by tie ups with collection people, he added.

Expansion & vision

Asked about expansion plans, Khosla, a steel industry veteran with global experience, who joined in 2018, said “We have a glass production capacity of 1,600 tonne a day in the two plants at present. In the next five years with growing demand, plans are to increase this by 50 per cent with possible plants in North and East.”

The growth in the glass industry is 6-7 per cent CAGR and is expected to grow. AGI is well placed to tap the emerging markets and sectors. At present it produces 6.5 million bottles a day for different industrial segments.

In the long term, the target of AGI, set up in 1972 and one of the oldest in the manufacturing sector in Hyderabad is to double the turnover and reach ₹2,500-2,600 crore, with a 20 per cent contribution from exports. The strategy is in place, he added.