Empee Distilleries sees better prospects

With new projects, Empee Distilleries sees better prospects

CHENNAI, DEC. 28: 

With Empee Distilleries’ major projects going on stream and a restructure at an advanced stage, the company hopes to do better in the current year as compared with 2011-12, according to its Chairman, M.P. Purushothaman.

Addressing shareholders at the AGM for the 18-month period ended September 30, Purushothaman said a 60-kilolitre-a-day grain-based distillery project in Andhra Pradesh has gone on stream and will reach full production in March. A brewery unit near Chennai started in the current year and Empee Distilleries’ subsidiary, EDL Properties, will launch a Rs 350-crore residential and commercial development. The company has also got the statutory approval to launch a new brand of liquor, El Canso Brandy, in Tamil Nadu. A restructuring that will make the group company, Empee Sugars and Chemicals, a subsidiary of Empee Distilleries will bring the sugar company’s 50 MW power project into its fold and augment revenue.

Shareholders have approved the proposal which is now awaiting court approval, he said. Nisha Purushothaman, Joint Managing Director, told shareholders that the company has had a tough year with product costs, primarily that of Indian Made Foreign Liquor stagnating, while input costs had increased. Nearly 90 per cent of its market is in Tamil Nadu where premium brands of liquor have taken a beating. But the trend is likely to change in the coming year.She said Empee Sugars’ 50-MW cogeneration unit has been converted into an independent power producer and is now a coal-based power project. For the 18-month period the company reported a net profit of Rs 22.80 crore on a total revenue of Rs 1,006.81 crore. During the previous year, the company reported a net profit of Rs 21.20 crore on a total revenue of Rs 594 crore. With the restructure and augmented sources of revenue the company will do better, she said.

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Lloyds Steel - EXPANSION

Miglanis hope to turn around Lloyds Steel

OUR BUREAU

MUMBAI, DEC. 28: 

Weeks after the acquisition of Lloyds Steel, the Miglani family has charted out plans to turnaround the company within one year.

Ultimate Logistics Solutions and Metallurgical Engineering and Equipments, the family-owned companies have invested Rs 647 crore (including the open offer of Rs 77 crore) in Lloyds Steel.

Ankit Miglani, Deputy Managing Director, Uttam Galva Steel, said having infused the requisite capital, the immediate target would be to reduce the cost of fund and increase production to 750,000 tonnes from 500,000 tonnes. “We are also negotiating with banks for Rs 1,500-crore line of credit which will be used for sourcing raw material and meet other operational expenses. Besides, we will bring down cost of debt by refinancing and tying up a long debt of Rs 300 crore,” he said. After enhancing the production, the marketing strategy will be reworked to make the company profitable and double EBITDA to Rs 260 crore within a year, he added.

BOARD RECAST

Apart from rechristening Lloyds Steel as Uttam Value Steels, the board was reconstituted on Friday with the induction of Rajinder Miglani, Ankit Miglani and Rajiv Munjal in place of the erstwhile promoter-directors. Miglanis have acquired 58.35 per cent in Lloyds Steel through preferential allotment and an open offer.

The company has a steelmaking capacity of one million tonnes a year in Maharashtra and has reported losses of Rs 213 crore in last two financial years.

It has a long-term debt of Rs 441 crore and debt-equity ratio of one is to one.

STRATEGY

Uttam Value Steel plans to concentrate on producing high quality steel for specialised application in power, oil and gas and infrastructure sector to enhance its margins.

On backward integration, Miglani said Uttam Galva currently supplies 80 per cent of Lloyds Steel raw materials. Miglanis are open to tapping private equity investment and investment from ArcelorMittal, which currently owns 33.80 per cent in Uttam Galva.

Expressing confidence that the shortage in iron supply will ease, Miglani said the industry has been impacted by the ban on iron ore mining and things will look up as the mining ban cannot be a permanent feature. “Even as global demand is expected to remain low, a revival in India is expected in couple of months. What is more worrying than demand is the fresh capacity that will go on stream in six months time,” he said.

suresh.iyengar@thehindu.co.in

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