Saint Gobain wants suppliers to slash rates

November 13th, 2008 - 7:16 pm ICT by IANS  

Chennai, Nov 13 (IANS) The Indian arm of leading French glass maker Saint-Gobain, which is developing a greenfield plant in Bhiwadi, Rajasthan, Thursday said it will renegotiate rates with the project’s suppliers to achieve substantial cost savings. “Taking advantage of slowdown and the general fall in prices we will renegotiate rates with our vendors for the Rajasthan project. However, I will not be able to comment on the price reduction that would happen,” Saint-Gobain India managing director B. Santhanam told reporters here on the sidelines of a seminar.

The company would ask the the suppliers who benefit from the price fall of crude oil, steel and other commodities to slash prices. There is scope for 10 percent reduction in purchase costs, he said.

In June this year, the company announced the 300,000-tonne plant at Bhiwadi, to be set up at an investment of Rs.10-billion. The new unit will take the company’s capacity to 750,000 tonnes per annum, as its Rs.15-billion unit at Sriperumbudur near here has a capacity of 450,000.

Asked about the impact of the slowdown on the company’s operations, he said: “We have increased market share to 41 percent as the concept of green building is catching up. Further, there is good demand from the solar energy sector.”

However, there has been no volume growth for the industry between January and October this year, Santhanam added.

“Our exports of value added glass to the Middle East has increased,” he said, adding that supplies to car exporters like Hyundai Motor India Ltd also went up.

“We will be hit by the delay in the Tata Nano launch as we are the sole sheet glass vendor,” Santhanam added.

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