Murugappa group to invest Rs 586 cr in group firms

The Chennai-based Murugappa grorup, which crossed Rs 15,500 crore in turnover, is planning to invest Rs Rs 586 crore in 2009-10 through its group companies.

Speaking to reporters today at Chennai A Vellayan, vice chairman, Murugappa Group said that the the company had invested Rs 850 crore in 2008-09 and planning to invest Rs 586 crore in 2009-10. 

The proposed investment include Rs 146 crore in Tube Investments of India (TII) which in turn will invest in setting up a metal forming manufacturing unit at Uttarakhand with an investment of Rs 90 crore.

Similarly the group company would invest Rs 115 crore in E.I.D Parry (India), Rs 180 crore in Coromandel Fertilisers Ltd, Rs 80 crore in Carborundum Universal and Rs 65 crore in other group companies.

N Srinivasan, director – finance, Murugappa Group said that the proposed investment will be funded through debt and equity.
Speaking about the new metal forming plant in Uttarakhand, which will be set up by TI Metal Forming, Srinivasan said that the new plant will cater to railway wagon segment. 

The company is expecting Rs 200 crore to Rs 300 crore revenue from this plant on the first year of operation. The plant would commence operation after an year.

Commenting about the group's result Vellayan said company's net profit increased to Rs 1,482 crore in 2008-09 as compared to Rs 585 crore, a year ago. He noted, 2008-09 profit include Rs 750 crore revenue by selling group company's 47 per cent stake in Parryware Roca Pvt Ltd last year.

The Group's turnover increased by 63.3 per cent to Rs 15, 646 crore as compared to Rs 9,582 crore, a year ago.

Vellayan added, in 2009-10 the company would look at strengthening its agri-business by acquiring new Tea estates in North East and will increase its sugar business. He added, the group's diversification, through TI Metal Forming is a significant strategy considering that more than 30 per cent of the sales for this division is estimated to come from the Railways vertical in 2009-10.