Date:06/05/2008 URL: http://www.thehindu.com/2008/05/06/stories/2008050655471600.htm

Business

Murugappa draws up Rs. 1,300-crore capex plan

Special Correspondent

Group sales up 16% at Rs. 9,600 crore
To expand retail chain ‘Mana Gromor’

— PHOTO: BIJOY GHOSH

AIMING HIGH: A. Vellayan (right), Vice-Chairman and Director, Strategy, Murugappa Group, with N. Srinivasan, Director, Finance, at a press meet in Chennai on Monday.

CHENNAI: The Murugappa Group has drawn up a Rs. 1,300-crore capital expenditure programme for 2008-09. The Group had a capex of Rs. 580 crore in 2007-08.

Addressing a press conference here on Monday, A. Vellayan, Vice-Chairman and Director (Strategy) of the group, said the group was aiming at a top-line growth of three times that of the GDP (gross domestic product) growth. He indicated that the group would have similar investment programme over the next couple of years or so to hit this top-line target. Mr. Vellayan said fertilizer, sugar, financial services, CUMI and value-added business in TI would all drive the top-line growth this year.

The group reported a 15.5 per rise in sales at Rs. 9,582 crore for the year ended March 2008. Exports were up by over 70 per cent at Rs. 591 crore against Rs. 346 crore in the preceding year. The earnings before interest, depreciation, tax and amortisation had grown by 17.4 per cent to Rs. 1,075 crore. The profit after tax stood at Rs. 535 crore (Rs. 615 crore).

Mr. Vellayan said 2007-08 was ‘a positive but mixed year’ for the group. Abrasives, sanitaryware, financial services and small business had all shown double digit growth. However, downturn in sugar cycle had eroded the profit in EID Parry. The sharp rise in steel prices had impacted Tube Investment of India (TII) very much, he added.

Mr. Vellayan said the group had reported a loss of Rs. 12 crore on bonds issued by the Central Government in lieu of cash towards fertilizer subsidy, as they had to be marked to market.

He said the retail chain store ‘Mana Gromor’ of Coromandel in Andhra Pradesh was doing well. In the light of the experience, ‘Mana Gromor’ could be expanded to its ‘addressable market’.

Mr. Vellayan said Coromandel Fertiliser was committed to invest $28.95 million in Tunisian Indian Fertilizer S.A. with Groupe Tunisien of Tunisia. “This project entails an investment of $515 million and is moving towards financial closure by this year,” he said.