Praveen Parasnis, Group Advisor, Sahyadri Industries, discusses the company's fourth quarter earnings and its future outlook.
Sahyadri Industries aims to sell Rs 100 crore of toilet blocks in the next couple of years,Praveen Parasnis, Group Advisor, Sahyadri Industries told CNBC-TV18.
The toilet requirement in Maharashtra alone was about 5.6 million units,Parasnis said, quoting a state cabinet minister.
The company’s total capacity was 660,000 metric tonnes per annum, he said.
The company's plant capacity of manufacturing sheets was in two categories.
"In corrugated sheets for roofing application our capacity is 45,000 metric tonnes per month and flat boards which are mainly export application and that capacity is 10,000 metric tonnes per month,” Parasnis said.
Sahayadri had also developed a social initiative for empowering rural women called build your backyard poultry (BYP) wherein household poultry with a capacity of 50-100 birds could be built, he said.
Below is the edited transcript of Praveen Parasnis’s interview with Ekta Batra and Mangalam Maloo on CNBC-TV18.
Mangalam: Before we start, for the benefit of our viewers could you broadly describe your core area of business and what are the growth drivers going forward for the brand Swastik and the company?
A: Sahyadri Industries Ltd. is a flagship company of Patel Group from Pune. We are into cement sheets and boards manufacturing business. We are in business for last 60 years and company is listed since 1994.
We manufacture roofing sheets which are called corrugated roofing sheets and we also manufacture flat boards which are non-asbestos based flat boards which have a good export potential.
Very recently we have participated in Swachh Bharat Abhiyan and developed a green toilet initiative which is eco-friendly as well as it is a green toilet initiative. It is a dry wall structure which dispenses with use of bricks, mortar and water which are natural resources which are wasted in conventional construction.
This is for factory made modular toilets which can be erected on site within a span of one hour. As well as they are green initiative because we use cement as well as fly ash. Fly ash is used to the extent of 30 percent.
We have also developed another social initiative for empowering rural women called build your backyard poultry (BYP) wherein household poultry with 50 birds or 100 birds can be built and there are local birds which can be reared.
The rearing time has come down through our experience by about four to five days and the chicks have grown in weight and returns an income of about Rs 5,000 per household per month.
So, these are the two major initiatives which we have taken and third initiative we have taken on exports of flat boards which are the growth drivers for the company.
Ekta: Do you think that you could benefit from the Swachh Bharat program from the government?
A: We have started receiving orders under Corporate social responsibility (CSR) spending by corporates, as well as there are many NGOs who have placed order on us for manufacture and erection of toilets in the semi-urban and rural areas. The traction has started.
Mangalam: So, you said that you had some orders, so what are the quantum of those orders and what is the order book position of the company right now?
A: This is a new initiative because we have been trying with the concept for the last one year and we have been successful. The orders are flowing in large numbers and we expect to make a good business out of it.
Very recently we had a meeting with the State Minister of Maharashtra Cabinet and he said the toilet requirement in Maharashtra state alone is about 5.6 million toilets. So, considering the volume, we intend to devote a good portion of our plant capacity for manufacturing toilet blocks.
Ekta: So what is the total capacity of your plants?
A: Our current plant capacity we manufacture sheets in two categories. Corrugated sheets for roofing application our capacity is 45,000 metric tonnes per month and flat boards which are mainly export application and that capacity is 10,000 metric tonnes per months. So our total capacity was 660,000 metric tonnes per annum.
Mangalam: What are the capacity utilisations, what do they stand at?
A: Last year the capacity utilisation was close to 85 percent.
Mangalam: Could you also quantify the orders or any internal targets that you have for the toilet sales that you have for the Swachh Bharat program?
A: I can give you numbers on what we have discussed internally and we are trying to target. We are targeting to sell toilets of about Rs 100 crore worth in the next two years.
Ekta: What are the margins that you enjoy on the toilet sheets?
A: The margins are better than our traditional business because here we not only manufacture the toilets but we also undertake erection of toilets on the site.
Ekta: And what are your traditional margins?
A: Traditional business under normalised condition margins at EBITDA level are 15 percent plus.
Ekta: So is it safe to assume that margins on toilet business are around 18-20 percent odd?
A: Yes, it can be reasonable to assume that.