Phoenix Yule to focus on south market

Phoenix Yule, the Indian arm of Phoenix AG, a global player in rubber products for industry, plans to focus on the southern region in the coming years.

The company foresees the south becoming an important market for its conveyor belts in view of the rapid economic growth taking place there.

Hence, Phoenix Yule, which is a zero debt company, is set to announce a major expansion there in the latter part of the year, according to managing director T K Mukherjee.

It may set up a "global factory" in Visakhapatnam which will raise its turnover to Rs 200 crore by 2008. In the current fiscal, the company expects a turnover of Rs 140 crore. Last year, the turnover was Rs 126 crore.

The expansion will be funded through internal resources. Currently it earns an EBIT (earnings before interest and tax) margin of 6-7 per cent.

The project is likely to cost around Rs 30-50 crore and is slated to be ready in 12-18 months. It will have the same production lines as the current sole production location near Kolkata but use more modern technology and therefore achieve higher quality benchmarks.

Phoenix Yule claims to be a leading conveyor belt manufacturing company of South Asia earning around 30 per cent of its revenues from exports.

The company was established in 1999 by spinning off the conveyor belting business of Kolkata-based public sector Andrew Yule and by German company Phoenix AG taking up a controlling 74 per cent stake.

The workforce of Phoenix Yule has come down from 640 in 1999 to 525, but even that is considered rather high.