Pune, April 13: Parmalat Spa of Italy, which took over the loss-making Swojas Energy Foods in November 1997, will seek the Foreign Investment Promotion Board (FIPB) permission to bring in additional funds. This will increase Swojas Energy's share capital and could hike the parent firm's holding from the present 51 per cent. This could lead to a change in the company's name.Swojas Energy, which is expected to break even by June this year, is likely to seek the centre's permission to expand capacities and increase its product licences in May.
Swojas Energy chairman and managing director Giorgio Lacovara said additional funds were required to re-capitalise the company. The Italian diary major intended to change the company's name, integrate Indian operations into its global one, he added. However, the timing was yet to be decided.
Swojas Energy, which has a plant at village Sarvad in Dhule with a 75,000-litres milk a day capacity, had a share capital of over Rs 8 crore at the time of the takeover.
Itslosses till November 1997 stood at Rs 5.5 crore with Parmalat having repaid dues worth approximately $2.4 million to financial institutions. It also brought in over Rs 8 crore, raising Swojas Energy's capital to Rs 16.46 crore, whereby Parmalat got a 51 per cent controlling stake. It will now have to bring in over Rs 8 crore, which will raise the company's share capital to about Rs 24 crore.
Additional funds were needed as Swojas Energy had incurred losses over the past three years, wiping out half its net worth. Lacovara said Swojas Energy should break even by June, within seven months of Parmalat taking over.
Having utilised its 5-tonne a day capacity, the company has been using those of a Punjab-based unit for dry (powder) products to the extent of about 2 tonnes a day. Daily sales of milk powder and dairy whiteners amounts to about 7 tonnes, which on an annualised basis is expected to give a turnover of Rs 28-30 crore for calendar year 1998.
In line with earlier commitments, the Italian diarymanufacturer will set up a joint venture company in Indonesia. The Indian operations will supply the skimmed milk powder for the Indonesian plant since liquid milk is scarce in that country. This is expected to begin before December.
Parmalat SPA of Italy, which has a wholly-owned holding company as well as the 51 per cent subsidiary Swojas Energy, could use the holding company to acquire 51 per cent stakes in other dairy or fruit juice companies.
Parmalat, which will eventually launch its portfolio of products in the domestic market, expects to invest in a packaging plant for which it plans to acquire a licence.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
