Sumeet Ind to enter real estate

Surat-based Sumeet Industries Ltd has decided to diversify its activities into real estate with an initial plan to develop 55 acres of land near the Kandla Port in addition to one lakh square metre near Surat.

The company has further plans to acquire 200 acres in the adjoining areas for developing into commercial and residential premises for which it is in talks with four-five infrastructure companies. For the long-term, the company is planning to set up an industrial park and power generation plants elsewhere.

"We are eying a joint venture with a real estate developer and a decision in this regard would be taken soon," said Shankarlal Somani, managing director of Sumeet Industries.

The company recently commissioned its Rs 2.5-crore menthol plant with a production capacity of 150 tonnes per month expandable to 800 tonnes per month in Surat.

Menthol is primarily used in sectors like confectionary, balm and toothpaste. When quizzed about the sales strategy, Somani said though they had not yet tied up with any local or overseas menthol consumers, they would use the network of the group companies, which are in the same line of business. The company plans to set up a 2.4-Mw gas-based power plant for captive consumption at an expenditure of Rs 5.5 crore.

The technology supplier for this plant is Deutz, Germany. This will be in addition to the existing coal-based power generation facility of 2.35 Mw. The new line of power plant will be commissioned by June 2007.

The company will require 13,000 cubic metre per day of gas for the new power plant for which it has tied up with the state government. "The gas-based power plant makes more sense as we want to reap the benefits of gas pipeline laid by Gujarat Gas Company in our factory premise. This will reduce our power and fuel expenses by about 30 per cent and we can save around Rs 2 crore per annum," Somani added.

Sumeet is currently engaged in manufacture of polyester filament yarn, polypropylene filament yarn and polyester fabrics with an annual capacity of 10,000 tonnes, 3,900 tonnes and 40 lakh tonnes respectively.

It reported 28 times increase in net profit during the quarter ended December 2006 to Rs 1.89 crore, against Rs 6.72 lakh during the corresponding period last year. Turnover during the quarter under consideration was at Rs 29.23 crore, compared with Rs 24.27 crore in the corresponding period last year.