Lloyds Line to help build export mkt, cut costs: APL Apollo

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Lloyds Line to help build export mkt, cut costs: APL Apollo

APL Apollo Tubes has just completed the acquisition of Lloyds Line Pipes for around Rs 40 crore. In an interview with CNBC-TV18, Pankaj Gupta, Director Finance, APL Apollo Tubes spoke on the latest acquisition of the company and the business plans going forward.

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APL Apollo Tubes has just completed the acquisition of Lloyds Line Pipes for around Rs 40 crore.

In an interview with CNBC-TV18, Pankaj Gupta, Director Finance, APL Apollo Tubes spoke on the latest acquisition of the company and the business plans going forward.

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

Q: What does this acquisition bring to you in terms of revenue and even profitability? For the end of the year how would your balance sheet look like?

A: Post acquisition we have ready to use API certified facilities in Western markets. We have a ready market to the tune of 3500-4000 metric tonne per month. This unit is situated in close proximity to the port and it not only brings raw material on cheaper rates but also ensures huge jump in exports.

As such, we are targeting in the next fiscal revenue to the tune of Rs 300 crore from this unit only with net margins of almost Rs 16 crore.

Q: Could you just highlight what your inorganic strategy is going forward?

A: We have certain plans. But we would first like to consolidate our recently installed capacities at Hosur and acquire Lloyds Line Pipe. After that we will come out with further expansion plans or acquisitions which may happen in due course.

As of now, we are the only players of the industry who have manufacturing presence in north, south and western part of India.

Q: You indicated that this acquisition will help you increase your exports. Currently it is only 5% of your revenues, how much further will it go up to and since it will help you purchase raw material at a lower rate what would your operating margins stand at?

A: Operating margins from that we are expecting somewhere around 12%. For the export markets we are targeting at least 4000 metric tonne of export to be done from that unit.