Lotte India looking to double capacity by 2008

KV Ramachandra, Managing Director of Lotte India Corporation  discusses the company's future plans and the numbers that it is aiming to acheive.

Excerpts from CNBC-TV18's exclusive interview with KV Ramachandra:

Q: You had done Rs 146 crore in terms of revenues and an EPS of Rs 3.7 in FY06. Is FY07 looking a lot better? When are your expansions kicking in?

A: In 2007-2008, we are primarily looking at expanding our existing facilities. By 2008, our new facility in Chennai would also be up, so by 2008, we are likely to be the double of our existing capacities, that is the current plan.

We had acquired 21.5 acres of land on the outskirts of Chennai and are looking to finish the construction of this facility by 2008 March-April.

Q: Give us an idea of how sales looks this year. What kind of sales growth are you expecting in FY07-08 and the sales growth after the expansions kick in?

A: Traditionally, what happens is the first half of the year is 45 and the second half of the year is 55, in terms of a sell split. That is how it has been in the previous years. We are tracking similar trends this year also.

So if you have looked at our first half of the year, we had done about Rs 76-77 crore and the second half of the year should be in line with the similar ratio as we have delivered in the past years. We would like to be at about Rs 500 crore by the end of three years from now and that is what we are looking at.

Currently, with the capacity of about 29,000 tonne per annum, we are looking at doubling the capacities by 2008. We are also bringing in a whole slew of new products into the market. Initially, we will start with some imports, but then we will look at manufacturing them here. So three years from now, we should be in the vicinity of about Rs 500 crore per annum.

Q: What sort of capex are you looking at for all these expansion plans that you have lined up? How much money will you actually be putting in to expand your capacity and this manufacturing unit? Would you be raising any money from the capital market?

A: No, we are not raising any money from the capital markets at this point in time. Currently, we are looking at a mix of internal accruals and external commercial borrowings. The Chennai facility should take us an investment of about Rs 150 crore. In the next three years, we will be looking at an investment of about Rs 300 crore in both new and existing facilities.