Murugappa Group lays out Rs 2,000 crore capex plan, revenue up 13 per cent

Murugappa Group said it planned to use the Rs. 2000 crore of funds it would raise through internal accruals in agricultural inputs, capacity expansion and building a phosphate plant.

Published: 17th May 2018 02:25 AM  |   Last Updated: 17th May 2018 05:42 AM   |  A+A-

MM Murugappan, Executive Chairman of Murugappa Group, and Group CFO Sridharan Rangarajan at a press conference on Wednesday | Express Photo

By Express News Service

CHENNAI: Chennai-based conglomerate Murugappa Group said on Wednesday it was investing Rs. 2000 crore over the next two years to cater to demand for phosphate-based fertilizers, remove bottlenecks in certain facilities in its engineering unit, and build a gas-based power plant in Russia.

The company, which is valued at Rs. 300 billion, said a major part of its exports out of India were crop protecting fertilizers, steel tubes and ceramics, and it was, therefore, building capacity to meet burgeoning demand.

Murugappa Group said it planned to use the Rs. 2000 crore of funds it would raise through internal accruals in agricultural inputs, capacity expansion and building a phosphate plant with 450 tpa capacity in Vizag to become self-sufficient.

The company said it felt the need to ramp up phosphate production due to the shutdown and relocation of phosphorous acid producing facilities in South Africa to Cochin as a result of expensive labour and amenities. Murugappa also said that a phosphate plant of Groupe Chimique Tunisien (GTC), in which it has a 15 per cent stake, had not operated at full capacity due to the fallout of the Arab Spring.

The company also said it had to shut down two plants in China that manufactured abrasives.

The group’s revenue for the year rose 13 per cent to Rs. 32,893 crore and EBITDA was up 34 per cent as its insurance and financing business was lifted by a robust demand for cars in India. However, the company’s EID Parry business posted a 35 per cent fall in EBITDA due to domestic and international oversupply of sugar in the market.

“Let alone the supply glut, we faced 50 per cent lesser availability in sugarcane due to the drought conditions in Tamil Nadu. Apart from sugar, we use molasses for power generation and also produce industrial alcohol, which was a challenge for us. We had also paid about Rs. 87 crore in arrears to farmers this year,” MM Murugappan, Executive Chairman of Murugappa Group, said.

Murugappa Group’s Tube Investments unit, which makes steel tubes, cycles, metal-formed products and gears, clocked a growth of 11 per cent during the year, but faced challenges in trade volumes across bicycles and related accessories.

Stay up to date on all the latest Business news with The New Indian Express App. Download now

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL2018