Mar 05, 2010, 04.23 PM | Source: CNBC-TV18
In an interview with CNBC-TV18, Ashok Hiramat, Chairman, Astec Lifescences, spoke about the latest happenings in his company and sector
Here is a verbatim transcript of the exclusive interview with Ashok Hiramat on CNBC-TV18. Also watch the accompanying video.
Q: What about the delay of your expansion plans, could you tell us when exactly your plans would come on stream? What your production would be post that and how much of an export augmentation do you expect because this entire expansion is associated with your export oriented unit, so how much percentage of exports do you expect post this expansion plan coming on board?
A: First of all let me clarify there is no delay in the expansion program. We had envisaged to complete our expansion by Q3 of the current financial year and I believe they are well on track to achieve the same thing. We have already ordered the equipment and a lot of work is going on, so I believe that the expansion will take place on time.
In terms of proportion of exports, today we got about 35% sales which come from our exports. Once the expansion is up and running the total effect is being seen in the following financial year FY10-11, we expect the proportion of exports to grow from 35 to 50% in the beginning and eventually four-five years down the line it can go upto 60-70%.
Q: Post the expansion you said you would be around 3,000 metric tonne is that your target?
A: No, we are going up from 2800 tonne to 3,900 tonne with roughly 40% increase in our capacity.
Q: The original time table was December 2010, so that stands?
Q: So what will that do to revenues in FY11 itself?
A: The full effect of expansion will not be seen in FY10-11, but nevertheless there is organic growth and we have seen a good growth in our existing products and strong demand and we should see a 30% growth in any case. The full effect of expansion would be seen in FY11-12.
Q: That would be what a 40% increase?
Q: What about Syngenta, how much you expect your order book to currently exceed by, right now it forms about 15% of your FY09 sales, how much are you targeting?
A: Itís quite early to say at the moment because we are still talking to them about the program for the following year. But we expect it to be maintained in a similar range.
Q: Your margins last reported were 24% does that stay for FY11 as well?
A: Yes, we expect the margins would be maintained. We have a number of cost reduction initiatives also running along that expansion. We see we will be able to maintain the margins inspite of increased competition.