New Delhi, July 1: Marvel Vinyls Ltd has struck an agreement with Korea General Plastic Ind Co Ltd, whereby the foreign company will be acquiring equity in the joint venture by relocating its existing plant in South Korea to set up an export oriented unit (EOU) for the manufacture of poly vinyl chloride (PVC) sheets and tiles here. The Korean company share will be worked out against the cost of the plant and machinery and technical know-how to be supplied to Marvel Vinyls.

Speaking to the Financial Express Korea General Plastic Ind Co Ltd chairman Kwang-Sik Kang, said that high cost of labour, unavailability of raw materials, cost of transport and distance from export markets are one of the main reasons for the plant relocation. The plant was set up in 1985 but has seen subsequent expansion and upgradation, Kang claimed. Marvel Vinyls Ltd managing director Pavan Chawla, said the total cost of the project would be Rs 20 crore.

"The joint venture will be importing plant and machinery worth Rs 5 to 7 crore," he said. The Indian promoters which includes Marvel Vinyls would hold a 75 per cent stake in the venture while the rest will be held by the Korean partner. The project is yet to receive the foreign investment promotion board (FIPB) nod.The Company plans to begin operations by April next year for the manufacture of poly vinyl chloride (PVC) floor coverings in Phase one to be followed by PVC tiles in the second phase of its operation.

As per the guidelines for EOUs, the company will export 75 per cent of its products that will be manufactured in Silvasa to South Africa, Ghana, Nepal, and Bangladesh. The plant will have a capacity of manufacturing 12,000 million tonnes of PVC floor covering.At present, ninety per cent of Korea General Plastic's production is being exported to different countries. The Korean company will be one of the first companies to bring in the PVC press tiles technology in the country.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.