Century Enka chairman B. K. Birla with other directors at the company’s AGM in Calcutta on Saturday. Picture by K. Roy Chowdhury

Calcutta, June 28 (PTI): Century Enka Limited has announced an ambitious Rs 170-crore capacity expansion programme for its Pune and Bharuch factories.

“Of the total amount, Rs 105 crore would be spent on setting up a conversion plant for surplus polyester chips to polyester yarn at Bharuch and the balance on replacing old machinery at Pune and other plants,” Century Enka’s senior president G.M. Singhvi said here while addressing the 37th annual general meeting of the company.

Later, talking to reporters, he said, “we have already committed close to Rs 65-68 crore since last year for improving machinery at all the plants.”

Singhvi said, “most of the funds for expansion would be arranged from internal accruals and if required institutional support might also be taken.”

He said the Rs 933-crore B.K. Birla group company had acquired the Pune plant in 1969 and a number of machines needed upgradation while the Bharuch plant started operation about five years back.

Explaining the reason behind going for the expansion at Bharuch, Singhvi said in polyester chips, the domestic supply was outstripping the demand significantly and the margins were under pressure and their share in domestic textile yarns market was only about six per cent.

The company, he said, was optimistic about the future in view of the ongoing modernisation, debottlenecking of existing capacitites of the manufacturing plants and the proposed expansion plan.

Singhvi said about 70 per cent of cost of their manufacturing was raw material prices and fluctuations in international prices of crude oil had a severe impact on their performance last fiscal.