Pokarna plans Rs 325-crore capacity expansion

Firm to double quartz output; will rely on internal accruals and loans to finance capex

Hyderabad-based granite manufacturing company Pokarna Limited on Tuesday said its wholly-owned subsidiary Pokarna Engineered Stone Limited (PESL) is planning to more than double the quartz surface production capacity by building a greenfield production facility at an investment of Rs 325 crore.The investment is expected to completed by June 2018.

According to Pokarna, the capacity expansion will be financed through a mix of internal accruals (Rs 75 crore) and loans (Rs 250 crore). PESL has already secured sanction from its lead banker for a term loan, the company said.

Pokarna Limited had reported a consolidated income of close to Rs 400 crore in the year 2015-16.

The investment in the new facility is part of Pokarna's strategic plan to maintain both export and domestic competitiveness, while increasing capacity to meet the growing demands for quartz surfaced in Indian and global market. The company has secured an exclusive right to use Bretonstone technology in India through March 2020.

The new facility will be one of the most-advanced Bretonstone plants of its kind in the world, covering a production area of approximately 50,000 square meters and deploying latest generation machines and state-of-the-art robots, according to the company.

"We remain committed towards investing in business expected to create significant value for our stake holders in the long term and we firmly believe that the quartz surfaces business is primed for growth. Securing an exclusive license for Bretonstone technology was an integral part of our strategy," PESL managing director Gautam Chand Jain said.

Breton SpA, which owns  Bretonstone technology, is the market leader in engineered stone manufacturing plants.

The Pokarna scrip was up by Rs 25.85, or 2.3 per cent, to Rs 1,150 a share on Tuesday, during afternoon trade on the Bombay Stock Exchange.