Sumeet starts menthol plant

Surat-based Sumeet Industries Ltd has commissioned its Rs 2.5 crore menthol plant with a production capacity of 150 tonnes per month expandable to 800 tonnes per month.

Funded by promoters, the low capital plant is expected to see a Rs 50 crore turnover and earn a net profit of Rs 2.5-3 crore in the next fiscal year.

"The demand for menthol is rising from sectors like confectionary, balm and toothpaste. Therefore, the commencement of menthol plant is timely," said Shankarlal Somani, managing director of Sumeet Industries.

When quizzed about the sales strategy, Somani said that although we have not yet tied up with any local or overseas menthol consumers, we will use the network of our group companies which are in the same business line.

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 presently 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.

With the menthol plant in place, the company is estimating a substantial boost in its turnover to Rs 200 crore and Rs 9 crore this fiscal from Rs 82 crore and Rs 4.7 crore in the last year.