Thaindian News

Chennai, May 10 (IANS) The Chennai-based Rs.22,314 crore-turnover industrial conglomerate Murugappa group is planning to spend around Rs.1,000 crore capex this fiscal in expanding its various businesses while looking out for acquisitions, said a senior group official.

“Our capex for this fiscal will be around Rs.1,000 crore which includes the balance unspent during the last year. The investments will by group companies - Tube Investments of India (Rs.500 crore), Coromandel International (Rs.280 crore), EID Parry (Rs.50 crore), Carborundum Universal (Rs.85 crore) and others (Rs.85 crore),” N. Srinivasan, director (finance), Murugappa Corporate Board (MCB) told reporters here Thursday.

According to him, the group companies would fund the capex with a mix of internal accruals and debt.

“We will look at domestic or external commercial borrowings (ECB) based on the cost of funds. Last fiscal the group’s capex excluding acquisitions was at Rs.632 crore,” he added.

Speaking about the group’s sugar refinery project at Kakinada in Andhra Pradesh in joint venture with Cargill, MCB executive chairman A. Vellayan said the Rs.500-crore project was shut down for around seven months for want of natural gas for its power plant.

He said the company has got permission to have coal fired plant at an outlay of around Rs.70 crore and the plant is expected to be operational in another 16 months.

“The shut down has resulted in a loss of Rs.200 crore to the company,” Vellayan added.

Looking back at the fiscal that went by, Vellayan said the group logged a topline growth of 31 percent to touch a turnover of Rs.22,314 crore up from Rs.17,051 crore posted during 2010-11.

Last fiscal the group acquired a majority stake in Sabero Organics, a listed company and a significant player in crop protection business, complimenting the portfolio similar products under Coromandel International.

“With Sabero acquisition, Coromandel International is one of the top five player in the segment and EID Parry is one of the top three sugar manufacturers in the country,” Vellayan said.

Coromandel International has a plant for setting up a green field facility for single super phosphate plant in Punjab and its Kakinada plant expansion by one million tonne will be commissioned this fiscal.

Vellayan said alongside its core business, the Murugappa group has also grown its other businesses such as, its rural retail outlets (revenue Rs.1,300 crore), farm mechanisation and nutraceuticals.

According to Vellayan, the group is aiming at a turnover of Rs.35,000 crore by 2013-14, logging a compound annual growth rate (CAGR) of 28 percent.