Chennai, Apr 22: The KCP Ltd has successfully commissioned a 2500tcd sugar plant at Vietnam in April, right on schedule, chairman and managing director VL Dutt told the Financial Express. The new company formed for the purpose, KCP Vietnam Industries Ltd, has got KCP along with the other Indian promoters holding two thirds of the $9 million equity. The project size was $22.5 million. A sum of $6 million was raised from Exim Bank and another $5 million from Canara Bank in UK. KCP is also planning to raise $2 million from Europe to cover the shortfall of the last $2 million for which equipment has been supplied.The sugar project also saw KCP's engineering division clock an export of Rs 36 crore, 18 per cent of the turnover. While equipment for the the sugar plant was supplied by group company FCB-KCP, the fabrication work came to KCP. Despite the lull in the economy, KCP managed to get 40 per cent of its income from the engineering division while the remaining came from cement.
Other orders executed werefor Neyveli Lignite Corporation and some for Fuller India. An export order for Taiwan for $1.2 million is through.
However the current year's prospects for the engineering division is bleak, admitted Dutt. "We have to do all we can to ensure that there is no lay-off," he said. But the company is hoping to see a revival of the cement and sugar sectors by December, when the engineering division would get activated again. KCP would also try more for export orders and slowly try to diversify in other areas of engineering such as chemical and petrochemical sectors.
On the cement front, the company is going for a total modernisation and rehabilitation of its cement plant at Macherla upto the clinker stage and limestone crushing in quarries. This project, costing Rs 30 crore, with loans from IDBI would be completed by the third quarter of the current year. After this, the company would think of putting up a new plant at Jagyarpet where it has lime stone quarries. The company is exploring the possibility ofbuying a new mill from FCB France.
The rehabilitation and modernisation of the Macherla plant is expected to reduce energy consumption by 15 units per tonne. The current capacity is half a million tonnes. Upon the completion of the hydel project along the left bank of the Nagarjuna canal (8.25mw ) the company will be saving Rs 2 per unit. This project costing Rs 44 crore will soon have eight units operational of the 11 planned.
Meanwhile, the fixed deposits by the public has shot up from Rs 17 crore in March 98 to Rs 30 crore in March 99. The lull in business, particularly engineering, would be used to reduce cost of borrowings and a shift to unsecured debt from secured debt, said Dutt. Debt to the tune of Rs 12 crore has already been repaid.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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