PVC maker, Responsive, to double capacity

Responsive Industries, a global manufacturer of polyvinyl chloride (PVC)-based products, is doubling its manufacturing capacity with an investment of Rs 580 crore.

The Mumbai-based listed company will increase its vinyl flooring capacity from 15,000 million tonnes yearly to 50,000 mt by the end of next year. The expansion will help the company corner 10 per cent of the global demand for vinyl floorings, which it sells in 24 categories and various price ranges, said Atit Agarwal, chairman and managing director.

Vinyl floorings have a global market worth $15 billion and Responsive Industries is among the top five global producers, after French companies Tarkett and Gerflor and US-based Armstrong and Polyfloor. Responsive Industries earn Rs 300 crore of business from vinyl floorings and exports 60 per cent of its production to 70 countries.

“We have in-principle approval from banks for raising $70 million (Rs 310 crore) of ECBs (external commercial borrowings) and as promoters’ contribution, we will invest Rs 230 crore. Of this, we have invested Rs 76 crore,” said Agarwal.

He said the rest of the funds would be raised from internal accrual. The new facilities are coming up at its manufacturing complex near Tarapur, in adjoining Thane district.

Responsive is also increasing the capacity of its seat covering and upholstery manufacturing lines, considering the huge demand from the automobile sector.

It is a major supplier of seat covers for the railways and various bus-body builders.

The company has a tie-up with US-based Lears, the largest automobile seat manufacturer in the world. Responsive controls 85 per cent of the bus-body seat cover market and 95 per cent of the market in canopies for three-wheelers in India. The company also supplies seat covers for automobile makers such as Mercedez-Benz, Volvo, Bajaj Auto and Tata Motors.

Manufacturing of synthetic ropes for the marine industry and ship moorings is another major business for Responsive, a company with a consolidated turnover of a little over Rs 850 crore, said Agarwal. Synthetic ropes are manufactured by its subsidiary, Axiom Cordages, which had revenue of Rs 350 crore in the previous financial year. Axiom is a niche player in the market and has a capacity to produce 32,520 mt per annum of ropes and split yarn ropes.

Responsive had been growing at a compounded annual rate of 33 per cent in recent years and would continue to maintain this rate for the next five years, said Agarwal.