Saint-Gobain Sights Break-Even In 01
Saint-Gobain India, which has put up a Rs 525 crore greenfield float glass plant at the Sipcot Industrial Park in Sriperumbudur, Chennai, hopes to break even in operational cash flow terms by the end of calendar 2001.
Talking to mediapersons, B Santhanam, managing director, Saint-Gobain Glass India Ltd, said the company has projected revenues of Rs 200 crore (including excise duties and sales tax) in the first full year of operations.
Spelling out Saint-Gobain's sales strategy in India, Santhanam said the company would initially target the building and automotive industry segment. "We will launch value-added glass varieties like reflective glass next year," he said.
The 200,000 tonne per annum facility, to be inaugurated by M Karunanidhi, chief minister of Tamil Nadu on Wednesday, September 27, is currently operating at 70 per cent capacity utilisation, Santhanam said. The company plans to export almost 30 per cent of its total tonnage per annum to countries including South Korea.
Dwelling on the industry dynamics, A Y Mahajan, delegate for India, Saint-Gobain said glass prices in India were amongst the lowest in the world. The three-year period 1993-96, which saw many entrants in the glass industry, had created excess capacity in India, he said.
"To a large extent the excess capacity has been absorbed," Mahajan said. Terming Saint-Gobain's timing in India as "appropriate and just right" he said the demand-supply position was set to improve in the near future. "We expect a 10-11 per cent growth per annum in the long run," he added.
On the price front, glass prices in India were amongst the lowest in the world. "Glass prices in India are 30 per cent lesser than the international prices," Mahajan said. However, prices in India too were also likely to get aligned to global prices, he said.
Saint-Gobain has funded the Indian project primarily through equity. While the company has availed of Indian rupee loans to the tune of Rs 200 crore from domestic banks including the State Bank of India (SBI), the balance Rs 325 crore has been pumped in as equity by the $24 million French parent firm, Saint Gobain.