Looking at expansion, Sanwaria Agro Oils Ltd is all set to explore avenues to
raise funds. "We plan to raise Rs 2 billion in the next 2 years for our
expansion / diversification projects. However, due to market volatility, we are
a bit cautious in fund raising," said Anil Agrawal, whole-time director,
Sanwaria Agro Oils.
"We will be setting up factories at our existing locations in Madhya Pradesh.
We will also focus on our captive power plants with the pace of capacity
expansion," Agrawal added.
The company plans to raise funds through a combination of QIB, ECBs, GDR or
private placement. In the first phase, it will raise Rs 50 crore.
The expansion will increase its current capacity of 2,650 mtn of soy seeds
crushing to 4,000 mtn.
In an effort to strengthen its pan-India presence with strong distribution
channels, Sanwaria Agro is tying up with Reliance Retail and Vishal Retail.
"By September 30, we will sign agreement with Vishal Retail, and by October
end, we will ink an agreement with Reliance Retail. Both the agreements will be
on long term basis," revealed Agrawal.
The company is targeting branded as well as private label segment through
various big retailers to reach maximum consumers in next 2-3 years. It has
acquired three solvent units in Madhya Pradesh and will continue such
acquisitions. According to Agrawal, this move will result in an additional
1,000 mtn capacity expansion.
Sanwaria Agro is joining a consortium of corporate farming which will help the
company grow special quality soy in Uruguay and Paraguay under the guidance of
the Solvent Extractors' Association of India.
Commenting on this move, Agrawal said, "at first, we will buy land there and
then will cultivate special soy seeds. We will bring those seeds to our Indian
facilities to extract oil. It will help us develop variant products."
On the financial front, net sales and net profit of the company have grown from
a CAGR of 85 per cent to phenomenal 286 per cent between FY 2006-05 and FY
2008-07. "In terms of EBIDTA, we expect 10-11 per cent growth by the end of the
current quarter," said Agrawal.
Sanwaria Agro Oils posted 2.39 times growth in net profit of Rs 208.14 million
for the quarter ended June 2008 against a profit of Rs 86.98 million for the
quarter ended June 2007. Net sales rose 84.89 per cent to Rs 2,743.35 million
for the quarter ended June 2008 from Rs 1,483.77 million for the same quarter
in 2007.
Source: Economic Times
Writing is good, thinking is better. Cleverness is good, patience is better.
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