Asahi India Glass Ltd. sees its annual revenue more than tripling to over INR 20 billion by 2012 from INR 5.88 billion in 2006, on export growth and increased sales of high margin products, a senior c…
Asahi India Glass Ltd. sees its annual revenue more than tripling to over INR 20 billion by 2012 from INR 5.88 billion in 2006, on export growth and increased sales of high margin products, a senior company official said. “I see exports more than doubling… perhaps to 20% (of revenue) in fiscal year 2008”, said Kunwar Narayan, Asahi India head of corporate marketing. The company“s fiscal year runs from April through March. However, Asahi India expects exports for the financial year ended 31 March 2007 to fall to 8% of revenue from 15% in 2006 as it has used most of its capacity to meet rising demand from the local market. A new production facility in northern India, which began operations in January 2007, will help the company increase capacity to meet domestic demand and also free capacity at another plant, which could be used for exports, he said. “Now the thrust will be on the export of automotive glass products”, he said, adding that these will contribute “significantly” to future revenue. Europe, where energy efficiency laws are pushing up demand for glass, will also be a source of strong demand. Asahi India also exports to the Middle East, which is seeing a construction boom. Asahi India, which says it has an 80% market share by volume in automotive glass products, posted a net profit of nearly INR 863 million in the financial year to 31 March 2006. That market share contributes to about 55% of the company“s revenues, Mr. Narayan said. It is hoping to ride the boom in India“s car market which is expected to triple to three million units by 2015. “But we expect to lose some original equipment market share over time (due to increasing competition)”, he said. The demand for original equipment comes from vehicle makers in India, who buy Asahi India“s products. However, the decline in market share will be offset by a growing market for replacement autoglass as the lifespan of cars in India is 15-18 years compared with 7-8 years abroad, he said. “About 10% of car owners change their windshields every year. The replacement market, where we have a 55% share is about 20% of the INR6 billion auto-glass market”, he added. Revenue will also go up thanks to value added products such as sound-proof, energy-saving and burglar-resistant glass, he said. At the end of March 2007, shareholders authorized Asahi India“s board to raise debt up to a maximum of INR 20 billion whenever required. Mr. Narayan declined to elaborate on this development. Asahi India is a joint venture between Japan“s Asahi Glass Co. Ltd., India“s top car maker Maruti Udyog Ltd., and the Labroo family. Japan“s Suzuki Motor Corp. holds a 54.2% stake in Maruti which controls half of India“s car market. It is also the main customer for Asahi India, Mr. Narayan said.