Investing to Rs 125cr to expand capacity: Sanghvi Forgings

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Investing to Rs 125cr to expand capacity: Sanghvi Forgings

Jayanti Sanghvi, managing director of Sanghvi Forgings and Engineering tells CNBC-TV18 that they are investing Rs 125 crore to expand capacity in their Baroda plant.

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Jayanti Sanghvi, managing director of Sanghvi Forgings and Engineering tells CNBC-TV18 that they are investing Rs 125 crore to expand capacity in their Baroda plant. "We are building new open dye forging plant where we will be able to do single piece forging of 40 metric tonne," he said.

The company currently manufacturers single piece forging of 4 metric tonne.

Sanghvi goes on to say that this plant will come into play in March next year, and will increase capacity by four times.

Below is an edited transcript of his interview with Sumaira Abidi and Ekta Batra. Also watch the accompanying video.

Q: We believe that Sanghvi Forgings has bagged some new orders. Could you take us through what these are and how it will translate into your bottomline?

A: We have bagged couple of new orders recently; one from the international market and the others from the Indian market. From the international market we have received orders from countries like Netherland and Canada, and from India it is from the oil and gas sector. We are bagging orders since the last couple of quarters and as our new projects will come on stream next year, we will have good backlog of orders to start with.

Q: What exactly would your total order book stand at and give us a breakup of how much you get from oil and gas?

A: Currently our order book is around Rs 30 crore and 50-51% is from oil and gas sector. Balance is from shipbuilding and power sector.

Q: You also have some expansion projects in Baroda. Take us through the investment plan there and how you would be funding it?

A: In our existing plant currently, we are manufacturing single piece forging of 4 metric tonne. Now we are increasing the capacity of our open dye forging plant by setting up a new plant. We are investing around Rs 125 crore in building new open dye forging plant where we will be able to do single piece forging of 40 metric tonne.

These types of items are generally imported in India and which are widely used by various sectors like oil and gas, shipbuilding and power.

Q: Could you tell us when this plant comes on stream and what will it take your capacity to?

A: This plant will come on stream by May 2012 and our current production capacity is 3600 metric tonne which will be increased by more than four times.