Exports to become 50% of biz going ahead: Garware Poly

Sun control films manufacturing Garware Polyesters has reported its earnings for the first quarter ended December 2010. The company has reported a 77% jump in net sales of Rs 265.33 crore from Rs 149.9 crore it did in the same quarter last year. Net profit rose 374% to Rs 51.08 crore compared to Rs 10.77 crore a year ago.

In an interview with CNBC-TV18, MS Adhul, Director, Garware Polyester gave his perspective on the quarter gone by and the road ahead.

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

Q: It has been a very strong quarter for you all. What do you expect in terms of revenue performance from your company for this entire year, given now that the anti-dumping duty which was placed is now been lifted?

A: In the last quarter definitely we had robust growth in sales. Quarter-by-quarter our performance is improving. We expect similar growth and similar performance in the next quarter.

Q: Can you just break-up what you did in terms of domestic and export market this time and also what you did in terms of your products which you generally work in?

A: Currently, if you look at the export and domestic break-up, about 45-50% is export and the balance is domestic. But after opening up business in Europe, we foresee better growth in exports. We may cross 50% total in exports in the coming quarter as well as in the next few years.

Q: We referred to the anti-dumping duty which was removed on Jan 20th for a couple of products for Garware Poly. Can you just give us what your European revenues were before the anti-dumping duty, what they possibly fell to and what do you expect it to come up to now?

A: The anti-dumping duty was imposed some time in 2001. Prior to that, we were very strong in Europe and USA also. So roughly our figures, out of export 30% of our export was in Europe which had totally vanished almost in the last 7-8 years.

Otherwise we tried to enter into Europe with a newer product which is a different product in the portfolio of polyester. With this opening of business in Europe we will regain our original position in Europe because our brand is very well established in Europe and it is very much accepted by the converters and the printers and the motor manufacturing companies.

Q: Have you signed up with any clients in Europe for exports?

A: Yes we have already contacted all our old clients. We have already started sampling and first consignment should leave this month after opening of business in Europe for us.

Q: We just want to understand the kind of growth you expect from Europe?

A: Today it is around 45%. So we expect another 15% growth in the Europe.

Q: Just a quick word on the margins you probably do in the shrink film category considering that you all have a monopoly in the Indian market and there are only about 3-4 players globally?

A: Shrink film is our monopoly in the Indian market and margins are in the level of almost 40% in shrink films.