The Board of Directors of GMM Pfaudler Ltd at its meeting held on May 23, 2020, has given an in-principle approval for the setting up a greenfield manufacturing facility for Glass Lined Equipment in Hyderabad, Telangana subject to the receipt of the relevant approvals.
The Company has seen a steep increase in the demand for Glass Lined equipment over the last 18 months mainly driven by the Indian chemical (Agrochemical & Specialty) industry which continues to grow strongly. The Pharmaceutical industry which has seen a slowdown for the last 3-4 quarters is also expected to increase investment in the coming months. The company expects the demand for Glass Lined equipment to continue to grow for the foreseeable future.
Based on market indications, the Chemical Industry is expected to grow in all three segments i.e. Pharma, Chemicals and Agro-chemicals in the short and medium term. GMM Pfaudler is the preferred vendor when it comes to glass lined equipment and there is a clear opportunity to grow along with the market as well as increase market share.
The current capacity is approximately 2400 Equivalent Units per year (Note: This excludes the capacity enhancement expected from the installation of two new gas furnaces by September 2020) and the existing capacity utilization is approximately 90%. The proposed capacity addition is expected to be 500 Equivalent Units and the proposed capacity is to be added within 12 to 18 months tentatively. The expansion project would entail an investment of INR 500 million approximately which would be funded through cash reserves.
With the Centre granting the National Investment Manufacturing Zone (NIMZ) status to Hyderabad Pharma City, the Telangana government is now going ahead with its plans to allot land to as many as 150 firms in phase I. The Telangana State Industrial Infrastructure Corporation (TSIIC) has already acquired about 8,500 acres for the Pharma City project, which is coming up at Mucherla in Rangareddy district on the outskirts of Hyderabad. The Government is speeding up the Pharma City project as all the required permissions, including environmental clearance, have already been granted by the Centre. Though the project was conceived in 2015, it took four years to get the clearances.
All Pharma Companies that have bulk drug manufacturing (API) require glass lined reactors and storage vessels at the heart of the plant. As the Hyderabad Pharma city will attract domestic and international pharma companies to put up bulk drug manufacturing in the manufacturing zone, our presence around Hyderabad would serve those industries well for the supply of glass lined equipment and other chemical processing equipment.
Therefore, the Company would like to take this opportunity to cater to the pharma companies coming up in the Hyderabad Pharma City.
Shares of GMM PFAUDLER LTD. was last trading in BSE at Rs.3892.75 as compared to the previous close of Rs. 3792.7. The total number of shares traded during the day was 3947 in over 1036 trades.
The stock hit an intraday high of Rs. 3980 and intraday low of 3805.05. The net turnover during the day was Rs. 15383709.