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Glassware maker Borosil will make a capital expenditure of Rs 625 crore over the next two years for the expansion of its consumer and scientific products business.
The company will be investing Rs 450 crore towards setting up of Borosilicate furnace for Pressware and a second Opalware furnace in its consumer business. An additional Rs 175 crore will be invested towards manufacturing of glass tubing used in scientific products like beakers, test tubes, drinking glasses, among others.
So far, the company has been importing products like its glass lunch boxes, mixing bowls, casseroles and baking dishes under the broader product category Borosilicate Press from Europe and China. However, it will now be manufacturing all of these in India.
Shreevar Kheruka, MD and CEO, Borosil, told FE: “We were so far selling these from imports, but now we are investing in making these in India. We are also doubling our capacity in the Opalware glass factory in Jaipur, where the furnace capacity will be increased from 42 tonne per day to 84 tonne per day by November-December 2022.”
Borosil was also buying glass tubing used in scientific and some consumer products from outside India and will now make it in-house, Kheruka said.
The move will help reign in some costs which have risen sharply over the last year, leading to the company hiking prices of its products across all segments.
Kheruka said Borosil took hikes of 10-15% in its products across segments as energy costs increased sharply and container freight rates remained at elevated levels. “Power and fuels costs went up sharply towards the end of last year and have stayed at those levels, though have not increased further. Container freight rates went up sharply by 500% and then came down by 20%, but are still 400% higher compared with two years ago. So, unfortunately, we had no option but to pass on the increases to the end consumer and increase our selling prices,” he said.
However, Kheruka said the company may consider a price reduction in the coming months depending on the volatility in the commodity prices. He said prices of some commodities such as paper and steel have come down in the last month or two, which do not impact the company directly, but have eased pressure on costs at some levels, even though power and fuel remain elevated.
“It is hard to take a call on pricing because it is changing a lot month-to-month making it hard to take monthly calls. Pricing needs to be consistent. So, we will wait for 2-3 months, see the volatility and then see what needs to be done. At the moment, we are not going to further increase any prices,” he said.
The company will also be investing Rs 20-30 crore in overhauling its front and back-end technology software over the next two to three years. The technology upgrade, among other things, will also involve investments in the company’s direct-to-consumer (D2C) portal myborosil.com.
Borosil doubled its net profit to Rs 85.2 crore for the full year ended March 31, while net sales surged 43.6% to about Rs 840 crore. The company’s Ebitda (earnings before interest, tax, depreciation and amortisation) was up 58.3% to Rs 157 crore, while the operating margins came in at 20%, up 240 basis points.
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