Capacity to double by June 2012: Manjushree Technopack

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Capacity to double by June 2012: Manjushree Technopack

Manjushree Technopack has gained after the company announced plans to double their capacity by the year-end. The company sees high growth opportunity in FMCG sector, says Vimal Kedia, Managing Director of Manjushree Technopack Ltd, in an exclusive interview with CNBC-TV18.

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Manjushree Technopack has gained after the company announced plans to double their capacity by the year-end. The company sees high growth opportunity in FMCG sector, says Vimal Kedia, Managing Director of Manjushree Technopack Ltd, in an exclusive interview with CNBC-TV18.

The company is developing two new factories in Banalore and has also signed the MOU with the Karnataka government. "We will be investing around 200 crore on this new project wherein our capacities will almost go double by mid of 2012," he said.

Below is a verbatim transcript of the interview. Also watch the accompanying video.

Q: We understand that you are looking at some capacity expansion, could you tell us your plans over there? Any kind of fund infusion or fund raising that you will need?

A: We are looking forward to put up new greenfield factory in the coming year. We have land allotted by government of Karnataka which is around 25 acre around the vicinity of Bangalore. We will be investing around 200 crore on this new project wherein our capacities will almost go double by mid of 2012.

Q: You are investing around Rs 200 crore for this capacity expansion, could you highlight how exactly you are going to be funding this and in terms of this increased capacity expansion? What sort of opportunities are you planning to tap in terms of an increased demand?

A: This funding will be done through debt as well as internal accruals. We foresee a huge growth of about 20% year on year in FMCG business. We look forward to see the dairy industry - fresh milk, beer, wine and edible oil to get into next two-three years into rigid packaging than flexible and other formats of glass etc today. This change is going to bring in big numbers for packaging industry in India.

Q: What are the big numbers that you are looking at, especially, for FY12?  Where are your capacity expansion accretion kicks in?

A: The capacity expansion will happen in June 2012. Today, we are 36,000 tonne and b June 2012 when we start a new plant it should touch over 50,000 tonne and subsequently to 70,000 tonne by 2013.

Q: We meant in terms of your revenues and profitability, if you could tell us the forecast for this year and next year?

A: This year we should be doing over Rs 200 crore, already predicted and the bottomline should be close to Rs 18-20 crore. Next year, we are looking forward to Rs 250 crore and proportionate bottomline would follow as per the old procedure.

Q: You spoke about FMCG being a strong opportunity for you in terms of sector going forward. How much does it comprise of in terms of a revenue share for you currently and what exactly would your current client profile look like?

A: Our FMCG clients contribute to almost 80% of company's turnover. We work with companies like Cadbury , Nestle , P&G, GlaxoSmithKline , Coca Cola, Pepsi, Unilever and almost every brand which you can think of in FMCG sector.

Q: Where are you seeing this increased growth coming from - renewed contracts from existing clients or would you be tapping into different FMCG players? What is the plan going forward in terms of augmenting the growth from the FMCG space?

A: One is, continuous growth in FMCG which is around 20% then we see lot of convergence happening from glass and other flexible format to rigid packaging which we are the leaders in India. We see the growth coming from these two segments and also pet preforms wherein big cola majors are coming to India besides existing Pepsi and Coca Cola. We have another big cola which recently launched in Mumbai in a big way and RC Cola is also there, these two are big names in carbonated soft drinks and they are eyeing India as the next growth centre.