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Glass manufacturer HNGI looks to build its presence overseas

Post Time:Aug 21,2009Classify:Company NewsView:512

Kolkata: India’s largest manufacturer of glass used in bottles, Hindustan National Glass and Industries Ltd (HNGI), is looking to acquire container glass manufacturing companies in regions such as West Asia, South-East Asia and Africa.

“We are in talks with three companies in these regions, and hopefully, something would materialize in the next couple of quarters,” said the company’s joint managing director Mukul Somany.

The company could even snap up more than one company, he added.

HNGI serves beverage makers—both alcoholic and non-alcoholic—pharmaceutical companies and food processors, and manufactures 50 million bottles a day.

The companies that it is looking to acquire have a turnover of Rs300-400 crore each and a production capacity of around 10 million bottles each—roughly one-fifth of HNGI’s current capacity.

“The acquisition would create access to new markets and also help us service our existing clients in these regions,” said R.R. Soni, HNGI’s executive director.

The company exports to some 23 companies in Europe, US, Africa and Asia, and about 9% of its Rs1,148.34 crore turnover in fiscal 2009 came from exports.

HNGI, which controls 65% of the domestic container glass industry both by turnover and volume, counts among its clients companies such as PepsiCo. Holdings India Ltd, Coca-Cola India Pvt. Ltd, United Spirits Ltd, Diageo India Pvt. Ltd, Pfizer Ltd and Reckitt Benckiser India Ltd.

Though he did not indicate how much the acquisitions could cost, Somany said HNGI was expecting an “internal rate of return of at least 18% annually” on the investments.

Meanwhile, HNGI is soon going to start manufacturing architectural and automotive glasses through a subsidiary company that has been formed—HNG Float Glass Ltd. The company is investing Rs600 crore in a manufacturing facility at Baroda, which is expected to start commercial production towards the end of December.

The company is also investing Rs350 crore in the current fiscal to expand its six manufacturing units in India, which are located at Rishra in West Bengal, Bahadurgarh in Haryana, Puducherry, Nashik in Maharashtra, and Neemrana in Rajasthan.

The expansion would raise its production capacity by 12% and make it one of the top 10 container glass manufacturers in the world.

The company is also introducing a new technology in bottle manufacturing, which is called narrow neck press and blow. The technology would make bottles 20% lighter and would reduce the cost by 10%, according to Soni.

Globally, only 10-15 companies have access to this technology and HNGI would be the first to introduce it in India, he added.

“The technology is currently being tested at our Bahadurgarh plant and would be rolled out across all our manufacturing units in four-six months,” he said.

Source: livemint.comAuthor: shangyi

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