DCW Lines up Capex Plan of Rs 525 Crores

DCW Ltd has announced that the Company has lined up a capital expenditure plan of Rs 525 crore, aimed at expanding its capacities and using the by-products to augment its bottomline. These are expected to be implemented by March 2008 in stages beginning from September 2007.

Dr. S C Jain - Chairman and Managing Director said that the Company plans to change its Mercury Cells into Membrane Cells which will increase the production from 60,000 to 1,00,000 of Caustic Soda per annum. This will also reduce the consumption of electricity by over 30%, thus increasing the profitability substantially.

The Company also plans to increase its Synthetic Rutile production from 30,000 tons to 60,000 tons. To reduce the cost of power and steam, a new Captive Thermal Plant of 50MW capacity and 70 tons of extra steam is under erection.

With the completion of the above, the profitability of the Company will go to up substantially from the present level of Rs 50 crores. To gainfully utilize its effluent, a new Iron Oxide Plant to produce Yellow, Red and Black grades is being put up. This will be done either in-house or with JV with a foreign Company of repute in this field. The capex for this project is estimated at Rs 125 crores. Profitability is estimated at Rs 30 crores per annum and may go on stream by November- December 2007.

He also said that the Company´s capital expenditure plan includes a Rs 150 crores FCCB offering over the next 18 months through very wellknown overseas merchant banker and long term loan from consortium of banks led by SBI.

The Rs 700 crores, Company has also decided to double its Soda Ash capacity from 1,00,000 to 2,00,000 tonnes with an investment of Rs 200 crores and a technical feasibility study has been conducted by the Dutch company Akzo and Humphrey and Glasgow will do the detailed engineering.

This Plant should be operational by end 2008. This project will increase the profit by Rs 40-45 crores per annum.

With regard to companies PVC manufacturing activity it may look at options to enhance shareholders value.

Source : Equity Bulls

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