Chennai(India) - Ennore Foundries Ltd (EFL) will be setting up two new plants apart from expanding its capacity at its existing plant near Chennai with an estimated investment of Rs 350 crore.
Addressing media persons here on Tuesday, V Mahadevan, managing director, EFL, said: "We will be setting up a new plant at Hyderabad with a capacity to manufacture 48,000 tonne per annum of ductile iron castings with an estimated investment of Rs 150 crore. The company has acquired 60 acres of land and the project is expect to go on stream by 2009-10."
Similarly, the company has acquired 40 acres of land adjacent to its existing plant at Sriperumbudur near Chennai to set up a 15,000 tonne per annum low pressure aluminium die casting with an estimated investment of Rs 120 crore. "In addition to that we will be also expanding the existing capacity of Sriperumbudur plant to 72,000 tonne from the current 50,000 tonne with an investment of Rs 50 crore." The remaining funds will be utilised for importing new machines and other capital expenditure, he added.
"We expect that our capacity will be more than doubled to 2,32,000 tonne per annum by 2010-11 and will become one of the major foundry in the world," he said. Of the projected capacity, the company plans to export 25% to the European and the US Markets, he added.
According to V Sankar, chief financial officer, EFL, to meet the overall expenditure plans, the company is planning a $25 million GDR issue while the remaining amount will be raised through internal accruals and debt. "Post GDR issue, the promoters' holding will come down to 75% as against 81% in expanded capital of the company," he said.
He said if more funds are required, the promoters are not averse to bring down their stake to 60% or so in the further expanded paid-up capital of the company. "We want to focus only on high-end castings and the company has made significant progress towards this," he added.
Mahadevan said, "our operational efficiency has undergone a tremendous change and is at par with that of international standards. With the installation of latest technologies, we expect to reduce the enquiry-to-sample supply time from 12 months to 6 months."