EKC plans to manufacture 3 mn cylinders per annum by 2010

Puneet Khurana, Executive Director, Everest Kanto, plans to manufacture 3 million cylinders per annum by 2010 and become the largest manufacturer of high-pressure gas cylinders in the world.

Moneycontrol's exclusive interview with Puneet Khurana, Executive Director, Everest Kanto

Q. Could you give some forward-looking numbers for your net profit and net sales in FY07?

In FY07, we expect sales to be around Rs 350 crore

Q. You are planning to form a wholly owned subsidiary in China to manufacture oil pressure gas cylinders and you have an investment of USD 50 mn to be raised by FCCBs and GDR. Has the money been raised? What is the reason of your looking at China? How will be growth in the Chinese market?

We have already formed a subsidiary in China, EKC Industries (Tainjin) Ltd. We are studying possibilities through FCCB and ECB routes.

In the coming 3-5 years China will  focus on CNG infrastructure and use CNG in vehicles to reduce their dependence on crude oil and in a way reduce vehicular pollution (Environmental reasons). 

China currently has 1 lakh CNG vehicle with 400 CNG stations and we expect it to reach 5 lakh and 2000 CNG stations by 2010. 

Q. You opened a Dubai subsidiary in March 2006 and now you are looking at a China subsidiary in a very short span plus you have been giving dividends. How are you managing this? How are your cash reserves looking?

We need to reward our shareholders in the form of dividend for their support which they gave to our IPO during Dec '05. Our cash reserves are looking strong. Our balance sheet has less debt burden so we can comfortably focus on our growth plans 

Q. In Dec 2005, your Greenfield project commenced production. Are you looking at any other projects like this?

We are looking at Greenfield projects In China and Iran.

Q. You are the amongst the top three manufacturers in the world. Who are your competitors? How much of a market share do you enjoy globally?

In the CNG business our competitors are Faber, Italy, Inflex, Argentina, Cilbras, Brazil.

Continued on page 2