Magnum Ventures to tap packaging industry

Delhi-based Magnum Ventures Ltd (MVL) plans to tap the growing packaging industry, especially in the retail sector. MVL, engaged in trading and manufacturing of paper for over 25 years, manufactures duplex board used in packaging.

MVL manufactures paper of 50 GSM to 90 GSM thickness, and also duplex boards of 230 GSM and 550 GSM. According to Praveen Jain, promoter and director of MVL, the packaging industry is growing at a rate of 10-14 per cent per annum.

"With this growth rate, we see a huge potential to tap the packaging industry with our duplex boards. If need be, we might go in for more production but it is too early to comment further on that," said Jain. The company is presently expanding its capacity utilisation and is also diversifying into the hospitality industry.

"We will be enhancing our capacity utilisation from 68 per cent of the 85,000 MT capacity to 85 per cent by the end of this year. We are also building a vegetarian 4-star hotel near Akshardham Temple in Ghaziabad district," informed Jain. The hotel, under the brand Country Inns and Suites is being built by MVL and will be maintained and managed by the Carlson Group of USA. The hotel will have 212 rooms, apart from banquet halls, swimming pools and other amenities.

Jain is hopeful of establishing the Country Inns and Suites brand in that region with the upcoming Commonwealth Games coming up in the vicinity. "Excavation work for the hotel project has already begun and we will be operational in 2009 and will have finished one year of its operation before the games begin," added Jain.

For its expansion and diversification, the company has set aside an investment of Rs 150 crore and has filed a red herring prospectus (RHP) with SEBI to raise funds for the drive through its second public issue. MVL is planning a public issue of 17.6 million shares of Rs 10 each through 100 per cent book building process. The premium will be decided after the price discovery, added Jain.

Of the Rs 150 crore, Rs 48 crore will be utilised for the expansion of capacity utilisation in its paper business and the remaining money will be used for the hotel project. Of the land bank of 62,000 square metres, around 10,000 square metres has been earmarked for the hotel, while 34,000 square metres have been occupied by the paper plant.

However, Jain did not rule out further expansion of the paper manufacturing capacity.