Globus Spirits eyes over 20% revenue growth in FY12

In an interview with CNBC-TV18, Ajay Swarup, MD, Globus Spirits, spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of his interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Also watch the accompanying video. Q: Take us through expanded capacity that comes into operation in the Q1. When exactly does it kickoff production? What does it do to FY12 revenues? A: The good news is that the expanded capacity at both our distilleries has now been commissioned. We are getting all the results already coming out of that expansion in terms of more capacity and in terms of better efficiencies. Hence, going forward, the Q1 of the year we will see the 100% benefit in terms of revenues and profit as a results of this expanded capacity coming into stream. Q: Can you throw in some numbers? How much is the expanded capacity? If it is already come on stream, what will be the benefit in this quarter itself in terms of revenues? A: The benefit in this quarter in terms of revenue would be marginal because the plants have been commissioned only very recently. In terms of next quarter, we can see our bulk alcohol division growing from our annual capacity of 30 million litres to 70 million litres. So in terms of the bulk spirit segment this would be more than a double, 100% increase. Like you know Globus Spirits operates in several sectors of the spirits business, of which bulk alcohol is one. Q: Would this be a gradual ramp up? Do you have the sales agreements in place for such a big scale up from 30 to 70? A: The good news is that this capacity increase comes on the back of an extremely bullish extra neutral alcohol (ENA) market. As a result, we already have enough orders in hand to meet our entire production, the increased production. With the ethanol picking in huge part of the country, distillation capacity has been diverted into ethanol. As a result, extra neutral alcohol, which is the bulk alcohol going into production of alcoholic beverages, is currently under pressure in terms of prices and supply. Our plants are coming into production at a very opportune time to take advantage of this situation. _PAGEBREAK_ Q: You also want to drive your revenues by getting into your own branded liquor. What is the trajectory on that front? How much are you going to use from these plants to produce your own branded liquor? A: We have launched several brands of Indian Made Foreign Liquor (IMFL) in nine of the country