Hyderabad :

Here is some good news. Procter & Gamble is all set to make operational one of its biggest manufacturing plants in Asia on the outskirts of Hyderabad. This is even as a few other multinationals are in the final stages of talks with the state government on buying land and setting up plants in Andhra Pradesh. These companies include Johnson & Johnson, Cadbury’s and Siemens.

P&G’s manufacturing plant is coming up at Kottur in Mahbubnagar district, about 36 kms from Hyderabad. Perhaps the biggest player in the beauty and grooming , houshold care, and health and well being segments, P&G India will be rolling out its products like Tide, Vicks, Ariel, Whisper, Olay, Gillette, Ambipur, Pampers, Pantene, Oral-B , Head & Shoulders , and Duracell etc, from the Kottur plant by April next year.

P&G purchased the land in July 2012 and construction on the manufacturing plant is on at full swing. “We have acquired about 170 acres of land, which will make this plant one of the biggest units in Asia. The land was purchased in July 2012 and so far we have invested Rs 370 crore in the project,” Madhav Rao, Associate Director – Product Supply, Procter & Gamble India, told TOI.

P&G has acquired 170 acres of land at Kottur in Mahbubnagar dist and the MNC has invested 370 cr in the project so far MNCs like Johnson & Johnson, Cadbury’s and Siemens are also setting up shops in AP P&G plant will be eligible for 100% stamp duty waiver and fixed power allocation

Cheap land lures P&G to Andhra Pradesh

While the MNC was not forthcoming about the price they paid for buying the land, state government sources said the land was sold at around Rs 60 lakh per acre. P&G had earlier scouted for land in Chennai to set up the manufacturing plant, but finally settled for AP in view of the cheaper land cost the state offered.

“One factor which was attractive for the MNCs to set up shop in AP was the land price. Neighbouring states are offering land to these companies at anywhere between Rs 1 to Rs 2 crore per acre. We swung the deal our way by offering a competitive price,” said sources in the industries department. As per the state’s new industrial policy , the P&G plant will be eligible for 100% stamp duty and fixed power allocation. The company’s request for a 75% reimbursement on Value Added Tax (VAT) for five years is under consideration, official sources added.Madhav Rao said P&G’s Kottur plant will provide direct and indirect employment to about 2,000 people. It will be the 6th P&G manufacturing plant in India, the others being in Mandideep (Madhya Pradesh), Baddi (Himachal Pradesh), Bhiwadi (Rajasthan ) and Goa. The other big plants of the Cincinnatibased MNC in Asia are located in China, Indonesia, Japan , South Korea, Thailand, Vietnam and the Philippines. “Our new plant in Hyderabad will be one of the largest production bases of P&G in Asia and the first phase of the plant is expected to begin production by April 2014,” Madhav Rao said.

MNCs in the final stages of setting shop in the state include Johnson & Johnson, which is seeking about 60 acres of land next to the P&G plant in Kottur for its fastmoving consumer goods plant, Siemens, which has sought about 25 acres of land in Visakhapatnam for setting up a plant for manufacturing electrical equipment, Pepsi Co which wants to set up a bottling plant at Sri City in Chittoor, and Cadbury’s which has sought 100 acres of land either in Toopran in Medak or Sri City in Chittoor district.

source: http://www.articles.timesofindia.indiatimes.com / The Times of India / Home> City> Hyderabad> Andhra Pradesh / TNN / June 13th, 2013

Hyderabad :

Sagar Cements Ltd will invest Rs 120 crore in laying a private railway line to improve its market reach and cut freight costs. The 7-km line will connect the company’s plant, near Matampally in Nalgonda district of Andhra Pradesh, with the main railway line. Of the proposed investment of Rs 120 crore, Rs 98 crore is to come from debt and the remaining from internal accruals.

COST SAVINGS

“Completion of this line will lead to better efficiencies and savings in costs. Rs 20 crore has already been invested in the project,” Sreekanth Reddy, Executive Director, Sagar Cements, toldBusiness Line here. The line is expected to be completed by FY2015 and dispatches by rail are expected to go up 20 per cent thereafter, he added. In the year ended March 2013, Sagar Cements’ dispatches were 15.50 lakh tonnes. Of this 39,449 tonnes were transported by rail.

On the revenue flow from the Sagar-Vacat joint venture cement plant, commissioned six months ago, Reddy said: “It was a long-term investment and we wanted to access certain markets through it.” Sagar Cements’ sales outside Andhra Pradesh have been steadily increasing and accounted for 46 per cent of total sales in the last financial year.

Capacity additions in the south continue to create an oversupply situation, dampening cement prices till recently. “We have consequently been compelled to look at States outside Andhra Pradesh,” he said, adding: “Right from the beginning, we have been doing it consciously as a de-risking strategy and to broad-base our reach.”

OUTLOOK

On the outlook for the year, he said things would largely remain the same. “With domestic coal becoming more readily available, our dependence on high-priced international coal will become moderate. This, in turn, helps us manage our costs better,” he said.

In 2012-13, Sagar Cements revenue stood at Rs 558.52 crore, with a net profit of Rs 8.78 crore. The scrip lost 2.96 per cent on the Bombay Stock Exchange on Thursday to end at Rs 195.30.

source: http://www.thehindubusinessline.com / Business Line / Home> Companies / by G. Naga Sridhar  naga.gunturi@thehindu.co.in / Hyderabad – June 13th, 2013