Uflex to invest Rs 1,150 cr on capacity expansion

Indian flexible packaging firm Uflex Ltd, will invest over $250 million (about Rs 1150 crore) in the next two years to enhance output from its manufacturing plants.

“In the coming two years, there will be an investment of $250 million to increase production at our plants in Mexico, India and Dubai”, Uflex Ltd Chairman and Managing Director Ashok Chaturvedi said here.

The firm, besides augmenting its existing plants output, will also start production at its new unit in Egypt, as part of a strategic move to increase company earnings from Rs 2,296 crore in 2009-10 to about Rs 4,500 crore ($1 billion) by 2013.

“We are aiming to double the production in our units and will mainly cater to the global markets. Our target is to have one billion dollar turnover by 2012-13,” Chaturvedi said.

Uflex has three manufacturing units in India and one each in Mexico and Dubai. The new plant in Egypt is likely to start production in July.

The company has current packaging capacity of 54,560 tonnes per annum (TPA), which will be enhanced to 79,000 TPA in the next two years.

Chaturvedi said the company’s three existing plants — at Jammu, Noida and Gwalior — are already operating at nearly full capacity and the new facility is intended to cope with the growing demand for flexible packaging in the market.

“The growth of organised retail segment and brands have increased demand for flexible packaging products, especially in FMCG and pharma segments. The Rs 15,000-crore domestic industry is growing at 15 per cent annually,” he added.

The firm, which is listed on BSE and NSE, has an existing annual capacity of over three lakh tonnes of flexible packaging, including both plastic films and laminates, at the three facilities.

Chaturvedi said that while the domestic packaging industry was growing by 15-18 per cent per annum, the global market was about five times larger, which gave his company the scope to add more customers.

“International revenue will account for nearly 60 per cent of our top line by 2013. This will also add to our margins, which are expected to go up to 22 per cent (current 20 per cent),” he said.

The company supplies flexible packaging materials to clients like PepsiCo, Nestle, Gillete, Ranbaxy, Procter & Gamble, Britannia and other FMCG and pharma companies in India and abroad.

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