"The company will invest about Rs 30 crore during the current fiscal for modernising its existing projects in the country. Apart from the term loan, we will raise Rs 10 crore as internal accruals,'' McDowell executive vice-president (finance) AK Ravi Nedungadi said.

Nedungadi said the remaining funds would be raised from banks and financial institutions as and when need arises. The expansion project will be completed in three years. The company wil spend about Rs 30 crore a year.

The company is also expecting some funds from the Lucknow-based Pradeshya Industrial and Investment Corporation Ltd. "Funds to the tune of Rs 5 crore from the Uttar Pradesh state-run institution will be utilised for the company's distilleries in Uttar Pradesh and neighbouring states," he said.

Theexpansion of the company's several manufacturing facilities involves upgradation of units and putting up more lines for packaging. The company is also in the process of implementing an enterprise resource planning (ERP) solution, for which the partner will be selected shortly. The total outlay envisaged in networking various offices of the company through V-Sat is about Rs 10 crore.

He said the trial production at the company's Bhopal unit is currently on. Commercial production will be started shortly. The Bhopal manufacturing facility - McDowell Vitari Ltd - is under a joint venture in which McDowell holds about 51 per cent stake.

Few years ago, McDowell & Co had appointed Andersen Consulting, a leading international management consultant, for conducting a restructuring programme. The Andersen Consulting recommendations on sourcing of raw materials have resulted in saving of Rs 10 crore or 5-10 per cent of manufacturing costs in one year.

"By restructuring current manufacturing arrangements, thecompany has managed to increase its own distillery production by 25 million cases. On a long-term basis, it is forging alliances with key suppliers and working out optimum cost-transport combinations for supplies," McDowell divisional vice-president (finance) A Harish Bhat said.

Developments are also under way to introduce low alcohol spirits which are popular internationally. With a market share of 22 per cent, McDowell plans to invest in malt, grape and cane spirits to further improve its whiskies, brandies and rums, three of the largest growing segments.