Murugappa group plans Rs 450 crore capex
Chennai: Industrial conglomerate USD 4.17 billion Murugappa group, while consolidating its acquisitions of last year, will invest around Rs.450 crore to complete on-going expansion plans, a top group official said.
The group plans expansion of 20 percent.
"This year, our focus will be on consolidating gains from acquisitions and completion of on-going expansion plans. The capital expenditure planned by the group this year is around Rs.450 crore," A. Vellayan, executive chairman of the Murugappa Corporate Board told reporters Friday.
Citing the predictions of a normal monsoon this year, Vellayan said the various group companies would be on the growth path.
"We are seeing marked change in the agricultural sector. With the prediction of normal monsoon, the signs are positive for our fertiliser, sugar and agricultural business lines," Vellayan added.
According to Vellayan, the group is hopeful of logging 20 percent growth this fiscal owing to positive points like decontrol of sugar, contributions from acquisitions and the growth in financial services.
"We expect the financial services business (non-banking finance company and general insurance) to log around 40 percent growth this year," Vellayan said.
Last year the Murugappa group entities invested around Rs.850 crore on stake acquisitions in companies like Shanthi Gears Ltd, Liberty Phosphate Ltd, Liberty Urvarak Limited, Thukela Refractries, Isithebe and Andhra Pradesh Gas Power Corporation.
The group also consolidated its stake in Financiere C10, S.A.S. (Sedis), France, bought out joint venture partner Cargill's stake in sugar refinery Silk Road Sugar Pvt Ltd and sugar major EID Parry completed the merger of two plants of the subsidiary Parrys Sugar Industries Ltd with itself.
The Murugappa group outfits also initiated/incurred capital expenditure last fiscal totaling Rs.900 crore.
"Our total capital expenditure last year was Rs.1,750 crore," said N.Srinivasan, director-finance.
According to him the sugar refinery at Kakinada in Andhra Pradesh will start operations next year and marketing teams have been put in place.
After being in operation for a brief period, the sugar refinery stopped for want of gas for its power plant.
Srinivasan said the power plant will now be powered by coal and there will not be any surplus power to sell.
"The original cost of the sugar refinery was Rs.320 crore and it now gone up by another Rs.150 crore," Srinivasan said.
He said the group's overseas investment arm based in Cyprus is not affected by the problem faced by the banking sector there.