Murugappa group not to exit insurance business

May 6th, 2010 - 9:56 pm ICT by IANS  

Chennai, May 6 (IANS) City-based Murugappa group has no plans to exit non-life insurance business transacted by Chola MS General Insurance Company, a top group official said Thursday.
“We will continue with the business as we foresee good business in the future,” said N. Srinivasan, the group’s finance director, scotching market rumours that the group is getting out of the general insurance business as it did in the case of mutual fund business.

Speaking to the reporters on the sidelines of the press meet here, he said: “In the years to come, the Japanese car companies will be selling more vehicles here. We hope to garner a good share of motor insurance.”

Chola MS General is focussing on Japanese and Korean companies located in India.

Last fiscal saw the $3.3 billion Murugappa group exiting the mutual fund business and buying out the DBS Bank’s 37.48 percent stake held in Cholamandalam DBS Finance.

The rejig in the financial business has led to rumours that the group is exiting the insurance venture as it is not core to its operations.

Meanwhile, the group is planning to invest around Rs.700 crore every year in its companies so that the overall turnover touches $7.2 billion by 2013-14.

“Major portion of the proposed investment will in Coromandel International, the group’s fertiliser company, and Tube Investments,” Executive Chairman A. Vellayan said.

According to him, Coromandel’s capacity will be increased to 4.2 million tonnes per annum from the current 3.2 million tonnes with an investment of around Rs 300-350 crore.

Finance Director Srinivasan said around Rs.250 crore will be pumped into Tube Investments’ metal forming and tube products divisions.

The division has made a major foray into railway business, setting up operations in Uttarkhand.

Referring to EID Parry’s acquisition of GMR Industries, Vellayan said: “The acquisition takes EID Parry’s total capacity to 35,000 tonnes crushing per day (TCD).”

The acquisition also gives EID Parry 200 acres of land and a licence to put up a new refinery, which may be utilised in the later stage.

The fiscal 2009-10 saw Murugappa group’s total turnover dropping 14 percent to Rs.13,617 crore.

Vellayan said the group invested around Rs.311 crore in all its business last fiscal as against Rs.850 crore the previous year.

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