Pune-based PVC pipe manufacturer Finolex Industries is planning to expand its product portfolio by entering into the water supply and water equipment business.
Also, as a part of this, the company is planning to increase its capacity of the PVC pipes and fittings plants by 40 per cent to 320,000 tonnes through an additional capital expenditure of Rs 90 crore spread over three years.
“We are planning to leverage our existing 15,000 dealers network that we built over the last 25 years. We are firming up plans to enter the water business. We are talking to a couple of consultants and a final plan would be formalized in 12-18 months. As an organisation we are keen on ensuring that the available water should reach the end user in the most efficient manner. We consider it our primary responsibility to ensure that the pipeline not only brings life into his crop but also brings him prosperity,” said Prakash Chhabria, executive chairman of Finolex Industries.
Finolex is eying $ 1 billion (apporx Rs 6,000 cr) turnover in the next five years. Finolex is also planning to launch new technology products related to water. However, it has not disclosed the details, it has tied up with few technology companies for this.
The company is spending over Rs 16 crore for this venture. Its non-pipe business will touch Rs 1,500 crore in the next two years. Finolex’s agri and non-agri business ratio is 70: 30 which will remain same in the future. The company caters only to the domestic market and does not have any exports of its products. The company which clocked a turnover of Rs 2,453 crore in 2013-14 is expecting to grow at a CAGR of 15 to 20 per cent over the next five years, which will see its turnover cross $ 1 billion.
While the PVC Resins business currently accounts for about one third of the turnover, the share of the pipes business is expected to grow year on year. At present, the company has three manufacturing plants—in Pune and Ratnagiri in Maharashtra and Masar, near Vadodara, in Gujarat with the total capacity of 206,000 tonnes.