La Opala: new plant at Uttaranchal

Indian crystal tableware manufacturer La Opala RG Limited is to set up a greenfield state-of-the-art plant at Uttaranchal for an estimated INR 350 million in order to meet growing demand.
The new pla…

Indian crystal tableware manufacturer La Opala RG Limited is to set up a greenfield state-of-the-art plant at Uttaranchal for an estimated INR 350 million in order to meet growing demand. The new plant, which will be funded through a combination of debt and equity, is expected to start commercial production by March 2007. The capacity of the plant will be 4,000 tonnes per annum. Managing director Mr Sushil Jhunjhunwala said: “Increase in disposable income, change in lifestyle and increase in demand of tableware have influenced our decision to set up a greenfield plant. We have procured machinery from Europe which will bring down our cost of production”. At present, La Opala has a factory at Madhupur in Jharkhand which makes 3,500 tonnes of tableware per annum. Mr Jhunjhunwala said the company would contribute INR 100-120 million from its internal accruals. The rest of the funds would come either through borrowings or through other instruments like preference shares and private placement. For this, the firm would increase its authorised share capital to INR 150 million from INR 50 million. Simultaneously, it was increasing its borrowing limit to INR 500 million from INR 200 million. Addressing shareholders at their meeting on 11 August 2006, chairman Mr A.C. Chakrabortti said that at a time when most of the tableware and crockery companies have closed down, La Opala has survived and has continuously paid dividends. The competition the company faces is not only from foreign brands, but also from the unorganised sector. With innovative designs and strategic pricing, La Opala has found the way to cut across different socio-economic segments and maintain its market share. La Opala also exports its products to Europe and the middle east under its own brand name.