India“s Vadodara-based Kemrock Industries has been able to emerge as one of the leading manufacturers of pultruder and its fibreglass reinforced plastics composites in the country.
The company make…
India“s Vadodara-based Kemrock Industries has been able to emerge as one of the leading manufacturers of pultruder and its fibreglass reinforced plastics composites in the country. The company makes a wide range of products for the domestic markets and continues to invest in accordance with the market growth. According to a recent report, Kemrock had entered the market with a Rs 4.8 crore initial public issue in April 1993. But the issue timing coincided with potical uncertainties in the country. Though the issue was fully subscribed, investors failed to pay the balance money on application. The company, however, went ahead with its project implementation plans with funding from financial institutions. It further expanded its capacity through internal accruals and reissue 22 lakh forfeited shares. Since then, there has been no looking back for the company. It entered into technical collaboration in December 1995 with Creative Pultrusions Inc. of the US, the world market leader and single largest producer of pultruded profiles, to provide technical and engineering assistance and advice to manufacture pultruded products. A major boosting factor was a Rs 3.50 crore order from Nirma Detergents company, to manufacture cable paths covering more than 80 km to be used on the soda ash project in Bhavnagar near Vadodara. Adds Kalpesh Patel, chairman and managing director, “Since the number of players in the industry are limited, our good work spread across and we were saw a sharp rise in order inflows.” Currently, Kemrock currently has orders worth around Rs 30-40 crore to be implemented in the next six-seven months. Significantly, last forthnight Creative Pultrusi-ons entered into an agreement with Kemrock to market its products in the international market. Kemrock plans to tap the international market in a big way with the help of its collaborator. Adds Patel, “Although pultrusion process is considered to be the most automated among all the processes available in fibreglass moulding, it still requires great deal of labour force. India being the source of highly skilled man power has great advantage over manufacturers of pultruded products in other parts of the globe.” Moreover, Kemrock also gains on account of its lower production costs. Also, the environmental condition stipulated in western Europe and USA call for a high capital investment as far as production facilities are concerned. This makes their products even more expensive. The potential is equally large on the home front. The Indian composites market is estimated to grow at around 100%. That“s because the composites market is highly innovative and can be a replacement for steel and wooden materials. A big customer is Indian Petrochemical Corporation had replaced wooden palates by fibre glass palates. Kemrock is equipped with 40 dies and an international technical collaboration. This gives Kemrock great flexibility to supply. Kemrock“s efforts are already reflecting in the financials, according to the report. For the nine months ended December 1999, it registered a net sales of Rs 11.64 crore, a rise of 218.63%. It registered a net profit of Rs 0.76 crore, a rise of 130.30%. It hopes to achieve a turnover of Rs 16-17 crore and a net profit of Rs 2.00-2.50 crore for fiscal 2000. On an equity base of Rs 5.04 crore, this translates into a earning per share of Rs 3.97 and. At its current price of Rs 32.70, investors could invest for medium to long term gains.