Calcutta, Oct. 13: Finolex Industries Ltd (FIL), flagship company of the Rs 2,500-crore Finolex group, is going ahead with a plan to double its production capacity from the existing 130,000 tonnes to 260,000 tonnes.
The company, which is one of the largest manufacturers of PVC (polyvinyl chloride) and related products, will make an investment of Rs 350 crore to expand capacity.
Sources said the investment would be made to match the expected growth in demand for PVC products, especially pipes and fittings, which are fast replacing metallic pipes.
“PVC products are given priority by the construction industry since they have several benefits like longevity, apart from the price of the pipes and fittings which are much cheaper than iron or ductile pipes. Demand for these products is expected to be more than double in the next three-four years time and we want to be ready to meet that demand,” they said.
They have, however, not divulged how the company will garner funds for the investment.
“FIL as well as the entire group is tremendously cash rich with a very strong reserve base. The debt-equity ratio is so low that borrowing funds will not be a problem. But most of the investment is likely to come from internal accruals,” sources said.
FIL has plants in Pune and Ratnagiri. The brownfield project, however, will be implemented at Ratnagiri, which is close to the sea. “Proximity to the sea provides us strong benefits in terms of transport costs both for raw materials and finished products,” they said.