The commissioning of the new manufacturing plant in Rajasthan will be in fourth quarter of the next financial year that is in Jan-March 2015 said MK Dhanuka, MD of Dhanuka Agritech. Once the production gets streamlined, the company expects Rs 500 crore revenue from the same, he said.
The construction for the plant is in full swing and orders for plant and machinery have already been placed, said Dhanuka.
Commenting on the capex plans for FY15, he said around Rs 50 crore of expansion for Rajasthan facility is planned, from internal accruals. 30% of the capex will be invested in current financial year and the rest in the next financial year.
The company as of now is debt-free except working capital requirements funded by banks, said Dhanuka.
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Below is the interview of MK Dhanuka, MD of Dhanuka Agritech with Reema Tendulkar and Nigel D’Souza on CNBC-TV18.
Nigel: Was just going through your numbers and your nine months performance is quite stellar. Can you tell us about your EBITDA margins, it is standing at around 16 percent for the last nine months, can you better that?
A: We are basically working to sustain these margins. We are expecting two molecules, which will launch in India for the first time in the next financial year. So, with the introduction and scaling up the sales for the new molecules definitely we hope that margins will not only sustain but there are hopes to increase that level also.
Reema: Can you use the operating leverage of increasing your pricing going ahead which could aid in sustaining your margins at these levels; can pricing go up in the next six months? If yes, by how much?
A: Now the Chinese government has also become very strict on environment and pollution norms. Indian companies are importing a lot of intermediates and chemicals to make active ingredient in India. So the prices by the Chinese suppliers have increased and ultimately that cost is passed on to the customers. So, we will be able to increase our prices according to market.
Nigel: I believe you have 6-7 new specialty molecules, how many do you plan to launch going ahead in the next three-four years odd?
A: We hope to launch two 93 molecules every year from FY14-FY15 continuously for three years. Six molecules are in pipeline and two such molecules will be launched every year from next financial year.
Reema: You are also expected to get a regulatory clearance for another in licensed molecule in Q4 of this fiscal year that is in the January to March quarter, when are you looking to launch that molecule?
A: We were expecting the regulatory 93 approval from Central Insecticides Board, Faridabad in Q4 of this fiscal year but now it is being little delayed so we hope to launch in Q1 of next financial year.
Reema: But you get the regulatory clearance this quarter?
A: It is expected any moment.
Nigel: What about your new plant at Rajasthan? How is that progressing, when can we see some kind of output from there?
A: The construction is going on full swing. We have already placed our orders for plant and machinery because it takes minimum 4-5 months delivery for new plants. We hope that the same will be commissioned by Q4 of next financial year, January-March of 2015; we will start production over there.
Nigel: What is the potential revenue we can expect from there?
A: Once the production will be streamlined, we can expect production of Rs 500 crore over there.
Reema: What is the total capex for FY15 and how do you plan to fund it?
A: The capex is around Rs 50 crore for this new facility in Rajasthan. Out of that 30% will be invested in current financial year and rest in next financial year. We are meeting our capex requirements from our internal accruals.
Reema: What is the debt on your books?
A: Ours is a debt-free company except working capital requirement from banks.
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