CHENNAI: The Murugappa Group said on Tuesday that it would double the capital expenditure during the current year from Rs. 430 crore in 2005-06. The capital expenditure for 2004-05 was Rs. 260 crore.

Addressing a press conference here, A. Vellayan, Director (External Relations) of the group, said the turnover of the Murugappa group had jumped to Rs. 7,340 crore, registering a 17 per cent rise. The net profit had increased by 45 per cent to Rs. 800 crore.

Most of the listed companies had shown improved performances both in terms of turnover and profit after tax. Chola DBS was the lone firm to report a virtually flat growth in sales and PAT. Mr. Vellayan said the performance of Chola DBS should be viewed in the context of pressure on margin in the automobile finance business. In this context, he pointed out that Chola DBS was getting into personal finance and second-hand vehicle finance.

Mr. Vellayan said the group was in the midst of a major expansion in tubes, abrasives, sanitaryware, pesticides, sugar and auto components. Upstream integration would be the focus of the group in fertilizer and abrasives businesses. In sugar, however, the focus would be on building integrated complexes. In Tube Investments, the game plan would be to go downstream with products and solutions.

Mr. Vellayan said the group would be setting up a 12,000-tonne cold drawn welded tube facility in China with an initial investment of around Rs. 28 crore. P. Datta, Director (Finance), said the plant would go commercial in March next year. The China unit, he said, would focus on OEMs (original equipment manufacturers) in the automobile segment. To a question, he said nine per cent of the group's total revenue came from global business, which stood at Rs. 625 crore in 2005-06.

On the proposed steel project in Orissa, he said there was no forward movement on the project, as there was no clarity yet on the issue of mining rights.

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