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Ennore Foundries lines up Rs. 350 cr. capex plan

CHENNAI: Ennore Foundries has lined up Rs. 350 crore capital expenditure in the next three years at its units in Ennore and Sriperumbudur near Chennai and in Hyderabad.

Addressing presspersons here on Monday, V. Mahadevan, Managing Director, said the company has commenced trial production at its greenfield foundry in Sriperumbudur and this facility would further enhance production capabilities of cylinder blocks and heads with 40 per cent of capacity available for export markets.

The pattern and tool shop and the design centre in Sriperumbudur have become operational, he said. The company has also completed the installation of a new moulding line at Ennore for producing bigger castings weighing up to 500 kg., he added.

The company was proceeding ahead with the plans for establishing a new facility for ductile iron and grey iron castings, including blocks and heads, and also for a low pressure die-casting line for aluminium. According to Dheeraj G. Hinduja, Co-Chairman, of the company, the funding requirements would be met through private placement of equity in the first phase and in the second stage, the company would opt for a mix of debt and equity. In effect, there would be 13-14 per cent capital dilution, he said.

Commenting on the future growth, he said the company was looking at various options, including acquisition. The company would be on a par with any modern foundry on a global basis, Mr. Dheeraj Hinduja said.

Meanwhile, the company has reported a rise of 19 per cent in its turnover at Rs. 215.06 crore in the first half of the financial year ended September 30, 2007 against Rs. 181.45 crore in the year ago period. The net profit has risen by 89 per cent to Rs. 8.77 crore from Rs. 4.65 crore.

The continued thrust on production of high-end products in the value chain, namely blocks and heads, yielded enhanced market access and better results.

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