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Finolex Pipes plans expansion, bets on agricultural growth

C.J. Punnathara

Kochi , April 7

FINOLEX Pipes, the largest PVC pipe manufacturer in the organised sector in the country, is going in for a two-phased expansion programme, enhancing the capacity from the current 65,000 tonnes to 100,000 tonnes.

Talking to a group of press persons Mr Vivek Khandekar, President of Finolex Industries Ltd, said: "The first phase of the project would take the capacity to 85,000 tonnes and the second phase to 100,000 tonnes."

The company is quite bullish on the agricultural revival of the country and plans to capitalise on the increased demand from irrigation, drinking water, industrial and the housing sectors. The surge in demand is expected to come from various quarters. Fuelling the growth would be the 20 per cent increase in the Central Plan outlay for agriculture. Large rural water supply schemes are on the anvil with assistance from international funding agencies. Andhra Pradesh has already initiated a Rs 1,200-crore micro-irrigation project, which alone will generate pipe requirement of Rs 300 crore. Finolex has formed a joint venture company with two Israeli companies involved in micro irrigation projects, Plastro and Plasson, to service this project.

Similar projects are being planned in Rajasthan, Maharashtra and Gujarat. The World Bank has already released funds for a drinking water and sanitation project in Maharashtra, which is also expected to buoy the demand further. There is also a rural drinking water project underway in Maharashtra, with funding from Germany.

"There are hardly any major players in the organised PVC pipes market in the country and even fewer who can execute such large orders," Mr Saurabh S. Dhanorkar, Commercial Director of Finolex Industries, said. Finolex, the market leader, has a 25 per cent share of the organised PVC pipes market.

According to a study conducted by the company, the demand will be ahead of supply in the coming years. The high demand coupled with lower capacity additions are also expected to drive up the margins.

As long as the demand continues, the margins are expected to remain attractive in the future, Mr Khandekar said.

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