BackEss Dee buys majority stake in Vedanta’s India Foil- report
Ess Dee buys majority stake in Vedanta’s India Foil- report
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Mumbai: Packaging firm Ess Dee Aluminium Ltd has said that it has acquired a majority stake in ailing India Foils Ltd, a Vedanta Group firm.
Ess Dee, which makes packaging products for drugmakers and fast moving consumer goods, said it has invested about Rs1.2 billion in India Foils for a 85-90% stake.
“It will be reasonable to expect that whatever Ess Dee’s turnover is in 2008-09, you should see (that) more than doubling next year," Ess Dee’s director Debdeep Bhattacharya said.
For 2008-09, the company would maintain the kind of growth seen in the last quarter," he added. For July-September, Ess Dee’s net profit grew 56% to Rs229.3 million, while revenue surged 70% to Rs1.24 billion.
Ess Dee Aluminium and Vedanta’s Madras Aluminium Co together invested Rs2.61 billion in India Foils in equity and preferential shares as part of a rehabilitation plan approved by the Board for Industrial and Financial Reconstruction (BIFR).
“With the acquisition of India Foils, Ess Dee’s rolling capacity would more than double to 37,000 tonnes from 18,000 now," Ajay Doshi, a director at Ess Dee, said.
“Of this, 12,000 tonnes would be restarted by March 2009, while the remaining would be added by next December," Doshi said.
“India Foils has three manufacturing units, of which two have been shut. Ess Dee expects to restart an ingot-to-sheet making unit in 4-5 months, while it would consider restarting the third unit at a later date," Doshi added.
“There was a lot of demand for packaging material from the pharmaceutical and FMCG sector, which had Ess Dee’s manufacturing units working at near 85% capacity," Bhattacharya said.
“It is a recession-free model. We are some distance away from giving up medicines or toiletries due to recession," he said.
“Ess Dee will focus on turning around India Foils, which is expected to report profits by March 2009, and will start looking for further acquisitions after that," he added.
“Turkey, Dubai, Europe, Brazil and Agrentina would be some of the countries that would be on Ess Dee’s radar," he said.
Ess Dee shares closed up 8.9% at Rs145.05 in a weak Mumbai market.
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