Cords Cable Industries' Rs85cr (US$20m) expansion project - Source: CNBC-TV18, moneycontrol.com

India's Cords Cable Industries has started construction of a new Rs.85 crore (US$20m) project, in the Alwar district of Rajasthan (India), to increase capacity of specialty cables aimed at the power industry, refineries, airport modernization and metro railways markets - of which Cords Cable is the largest manufacturer in India.

Naveen Sawhney, Managing Director, said at the beginning of January that he expects the new project will be commissioned towards July 2010 and fully operative from Q3 of fiscal 2010-11 at the rated output, reaching total output in 2011-12 only - when turnover should be around Rs550-600 crore (US$121-132m). About 20-25% of output is expected to go to overseas markets mainly in Eastern Europe, the Middle East and Africa.


Here is a verbatim transcript of the interview:
Q: Highlight your expansion plans; on what segment would you be focusing on because you are pretty diversified on the entire cable industry, where would a bulk of this expansion come in? What is the amount you are planning to spend? How are you planning to fund it and eventually when will all this start hitting your topline?

A: We have already commenced the construction for this new project, which is in Alwar district in the State of Rajasthan, the construction is on and the machinery orders have been placed. This is basically to augment our capacity specially incase of this specialty cables, of which we are the largest manufacturers of this in the country. The proceeds of it would be going towards the power industry, refineries, airport modernization metro railways, etc. About 20-25% of our output, we expect to come from the overseas market mainly the Eastern Europe, Middle East and African Markets. We expect to get it commissioned towards July 2010.

Q: Put some more numbers, in terms of what this would do to your earnings projection because there are some reports that suggest it could take you to a different orbit in terms of your topline when this comes on your stream maybe even make you a Rs 500 crore turnover company? Is that true and when would that happen? How much are you investing in this entire expansion plan?

A: We are investing about Rs 85 crore in this project. About Rs 50 crore is to come from the IPO proceeds and for the rest, we have got the term loans sanctioned both from ICICI and IDBI. So all the funds have been tied up and there is no issue on that account. Because of the recession last year, we have had an effect to some extent. But the way things are taking shape, we expect 2010 and 2011 to be much better as compared to the last year and the present which is going on.

Q: So can we expect a Rs 500 crore turnover then, after all this capacity comes on stream?

A: Not in 2010-11. But definitely it should exceed because the expansion should get commissioned in the month of July, we would need another 2-3 months to get this stabilized. From Q3 onwards in 2010-11, we will get the rated output. But we are going to get the total output in 2011-12 only. In that year the topline, if we take the commodity at the present level it should be around Rs 550-600 crore.

- Source: CNBC-TV18, moneycontrol.com

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