Shetron in pact with Denmark's Metropak for joint venture

Plans Rs 80-crore investment in two phases

Shetron, a Bangalore-based makers of battery jackets, plans to focus on the fast growing agro-food packaging sector in the country in addition to battery jackets.

Speaking with Business Standard, Diwakar S Shetty, managing director of Shetron Limited, said the company had tied up with Metropak of Denmark to float a joint venture company 'Shetron-Metropak' to commercially produce premium cans.

"The 50:50 venture, to be set up in Bangalore, will produce 150 million twist-off caps per year for bottles used by the processed foods industry for both domestic and global use," he added.

Shetron-Metropak is a Rs 7-crore project with an equity of Rs 2 crore each by the partners. The balance is debt-funded by the Danish government's IFU. It is expected to start production by January 2007, said V V Krishnamurthy, vice-president-finance and projects, Shetron.

The company is pumping in Rs 80 crore in two phases to beef up production both at Bangalore and Mumbai factories. It currently has a capacity of around 30 million cans per year. Phase I will see an investment of Rs 20 crore this year after which the production would go up to 80 to 100 million cans per year.

Phase II will be taken up in 2007 and the company would invest Rs 60 crore to double the capacity from 100 million cans per year to 200 million cans per year by 2008. The company, in addition to capacity expansion, is also looking at acquisition in both domestic and international markets.

Post modernisation in 2009, the company will target the high-end food and beverage sector, said Shetty.

Shetron has been supplying premium metal cans to FMCG and food majors like HLL, Nestle, Tata Coffee, Global Green and Amul.

In India, metal cans industry is valued at round Rs 600 crore with organised players numbering four having a market share of 30 per cent. The sector is growing 20 per cent annually with more companies entering agro-food production and exports.

According to Shetty, many Indian companies have begun to export gherkins, mango pulp and coffee in metal cans.

Shetron is targeting a turnover of Rs 110 crore for the financial year 2006-07. In 2005-06, the company posted Rs 83 crore turnover, with 30 per cent coming from exports.