Mumbai: Glass falconage maker Piramal Glass expects to raise capacity of its cosmetics and perfumes bottles by about 40% to 550 tonne a day by March, as it looks to capitalise on low-cost advantage to draw more business from Europe.
“Although the growth outlook in Europe looks stable. There might be some drop in the demand for premium segment. But we have a huge cost advantage against European players, which will help us draw more business,” Vijay Shah, managing director, Piramal Glass, told Reuters.
Vijay Shah, managing director, Piramal Glass Limited. Photo: Abhijit Bhatlekar/Mint.
Manufacturing of cosmetics and perfumes bottles in India happens at about 46% of the total costs incurred in Europe, he said.
The company is setting up a new manufacturing facility in the state of Gujarat, which would become operational by March 2012, making Piramal Glass the world’s second largest cosmetics and perfumes bottles after France’s SGD, it said.
The Mumbai-based company, part of Ajay Piramal group that runs Piramal Healthcare and Piramal Life Sciences, earlier reported a 11% rise in September-quarter net profit to Rs 229.5 million.
Sales rose 7.4% in July-September to Rs 323 crore as its biggest furnace was shut for realignment during the quarter.
“Post the realignment, the capacity of this furnace will rise to 250 tonnes per day from present 230 tonnes,” he said adding the company would post 16-18% sales growth over the next two years.
The glass bottles maker, which has operations in 54 countries and counts Hindustan Unilever, L’Oreal and LVMH among its clients, expects its debt-to-equity ratio falling to 1.5:1 in 2013 from present 2.5:1, chairman Ajay Piramal told ET Now television channel.
At 3:07 pm, shares of Piramal Glass, which have lost 6% value in the last three months, were trading at Rs 123.40, down 3.6% in a firm Mumbai market.