MANIYAR PLAST LIMITED
TO THE SHAREHOLDERS
A small unit with a turnovel of about Rs. 2.50 croles comes out with plans to
expand its size to about seven times and then achieves the target withm six
months. Not sitting idle enjoying this achievement the company plans another
expansion and diversification and starts implementing it. This is the story
of your company Maniyar Plast Limited.
The company incorporated in 1.984 to produce woven sacks and fabrics kept
silently addmg to its capcqcity developing its persollnel and cleated a niche
in the malket. After making swe that it was pe.lfectly the right time to
expand the company decided to increase its manufacturing capacity from 276
MT per annum to 2166 MT per annum.
For this purpose the company incleased the equity capital in 1.9.93. The
promotels stake stands at more than 60% todny and IDBI is holding approx
11.5% (Rs. 50 Lakhs) of (total equity capital with a lock-in period oi thee
years upto Jan. 1.997. IDBI also pwvided a term loan of Rs. 250 lakhs for
purpose of expansion. lDBI has nominated a Directol on the Board of the
Due to long experience a corlect choice was made in selectil the vendors of
plant and machinely i.e. Extrudel Iiom Win folar Germany and St1l1inger looms
from Austria. A natural outcome of good inputs i.e. the latest machinely and
trained personnel was production of very good quality tinished goods.
Encouraged vith the successful expansion the Board has recommended a maiden
dividend of 15% as against 10% projected in the appraisal repolt before the
public issue. This was inspite of 2 months commercial production. The
capacity utilisation and profitability projections made at time of public
issue as appraised by II)BI are also being exceeded.
The marketing of the incleased production proved relatively easy. With good
relationship and reputation already created with the customers the incleased
production is being well accepted by the customers. The order book position
is healthy with orders of one crore and 25 lakh bags which is equivalent to
four months production. Olders are normaUy not accepted or placed for woven
sacks for more than three months due to fluctuating raw material prices. To
meet the demand of buyers, your company is getting job work done fiom nearby
limits in the same line of manufacture. The company has also intalled its own
Your company is enjoying healthy relationship with its main raw material
suppliers who are ever ready to supply the material at favourable terms to
The company is planning further expansion in field of woven sacks by raising
its capacity from 2166 MT to 056 MT per anum. The suppliers of plant and
machinely wiD be same as per last expansion i.e. Lohia Starlinger Limited.
The product range will further increase with this expansion. With projected bright future of cement and fertilise companies, of main
customers, your company expects the ordel bdoks to remain fuD aver a vely
long period. Under such conditions, your company expects to become one of the
top producels of woven sacks in India within vely short span of time. Your
company is also working in direction of obtaining ISO certification.
As part of expansion/diversification, your company has taken suitable steps
to produce tarpaulins by importing machinely from Switzel1and. The machinely
has arlived and the production has started. This is fwther expected to
increase the profits of the company. Howevel, the profits added by this lins
of' manufacture have not been considered in the projections made below as the
company is going to produce this item for the first time, the total market
size is unknown and the biggest reason is the low availability of woven
fabric which will be available to produce woven sacks as a matter of priority
for our valued customers. Your company has also received several enquiries
for export of woven sacks. In fact owner of Jung Shin Co. Ltd of.S orea had
personally come to Jalgaon and demanded full production of your company.
You will also be glad to know that your company is also diversifying into
production of plastic moulded furniture and crates. For production of
furniture, your company has entered into technical collaboration with M/s.
Italtech, a member of FIAT oup of companies of Italy, who have an annual
turnover of more than 10 billion dollars equivalent to Rs. 30000 crores. They
will be supplying the maill plant snd machiney and moulds for this
diversification project. The machinely which is going to be supplied will be
state-of-art machinery and no Indian manufacturer of plastic furniture is
having such an advanced machinery. The machine will have capacity to produce
at least one and a half times faster and also the law material used will be
10% less resulting in lowest cost of producetion. In short, one chair will be
produced in 37 seconds or 2000 chails will be produced per day.
This line of business is not new for promotel s who are dealing with plastic
for a long time. The company is also making efforts to export a major part
of production. Your company has received export enquiries from several
parties in Europe and West Asia. The types of chairs to be manufactured are
Both the lines of manufacture are pollution free. In fact production of
plastic furniture will help in presenvation precious forests by reducing
requirement of wood for furniture. The plastic furniture offers other
advantages like long life, easy maintainability, stackability, attractive
colouls, termites proof and many mole.
The land was procurred in the last expansion when provision was kept for the
future. The location has logristic advantages like closeness to law material
suppliers as lvell as major cost advantages such as cheap and abundant labour
The construction h.s started for the expansion as well as diversification
projects and expected to be completed by Oct. 1994.
Recruitment of suitable personnel for the furniture project has started. In
the furnitule line, marketing plays a very important role and therefore a
major action has started in line of finding the best marketing strategies.
Your company is negotiating with international companies for supply of
The financing of the new projects is being done through internal
accrual, loan from IDBI and DPG facility. The present debt to equity ratio
is vely low and this gives leverage to the company to raise new finance
without rising the equity capital. The company is negotiating foreign
currency and rupee term loans with IDBI. IDBl has appraised the project.
The company expects to get the sanctionn of IDBI shortly.
With the new projects On stream, your directors expect an EPS of more than
Rs. 6 in the current year and Rs. 13 to 16 in the next financial year
based on the present trend.
At the end, I wish to place On record my sincere thanks to all my colleagues
on the board for their valuable guidance. I also thank IDI and UBI for
their timely financiaala support. I also thank other business associates for
their cooperation. I also thankful to the staff, workers and their
family members for their efforts in making your company successful. Last but
not the least, I thank you all for showing your confidence in your board.