Borosil Glass Works is increasing its capex eight times
Borosil’s increase in capex will be used to increase its warehouse space as well as enhance its supply chain and logistics post GST.
Borosil Glass Works is increasing its capex eight times, from INR 15 crore last year to INR 120 crore on the back of new GST norms for warehousing and distribution.
Shreevar Kheruka, Managing Director, Borsosil Glass Works said, “GST norms mandate bigger warehouses for distribution and this is one of the reasons why our capex has jumped significantly to INR 120 crore this year compared to a much small amount of INR 15 crore last year.’’
The increase in capex would also get used to enhance its supply chain and logistics post GST.
Having acquired local company Hope Ware Table last year for INR 90 crore, it made an entry into the opal glass dinner ware segment. It now has plans of expanding the capacity for the opal glass dinner sets by almost 50%, which would get included in the assigned capex for plant and machinery.
Apart from glass products, Borosil entered the small appliance segment about a year ago with products like mixer grinders and rice cookers.
“GST would have varied impact ranging 8% to 28% since we have a wide product range and we would be passing on the benefits to consumers,” he added.
Currently Borosil reaches out its products across 10,000 stores and intends increasing its distribution by 10% every year.
With a turnover of INR 575 crore, of which INR 220 crore is from its consumer division, which also includes small appliances. It has plans of doubling its turnover from the consumer division in the next three years.
The 52 year old company is now intensifying its move against plastic in the lunch box segment, where it plans to pit its offering against big majors like Tupperware, Milton and Cello.
“We are going to be the first player to enter the glass based tiffin segment to compete against players like Tupperware with similar pricing. The message given out will be the fact that glass is chemical free, easier to clean and if made stronger can be less brittle,’’ he added.
The lunch box segment is estimated at INR 500 crore with a majority of players in the unorganised segment.
Going forward, Borosil would propagate the virtues of glass versus plastics across a range of categories including baby feeding bottles.
With an ad spend at INR 25 crore, Borosil would be taking up its fight against plastic across a range of categories which would include water jugs and storage containers.