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Hind Glass goes south, in style

Monday, 26 November 2012 - 9:04am IST | Place: Kolkata | Agency: DNA
India's largest glass bottle maker and supplier to a variety of companies has set right a long-standing anomaly: absence of a strong presence in the southern region, the biggest market for alcohol and beer.

Hindustan National Glass and Industries (HNGI), India's largest glass bottle maker and supplier to a variety of companies, has set right a long-standing anomaly: absence of a strong presence in the southern region, the biggest market for alcohol and beer.

It has done so in a grand style – by commissioning what is claimed to be the largest glass manufacturing complex in south-east Asia, a 650-tonne-per-day (tpd) glass bottle plant at Naidupeta in Andhra Pradesh.

The plant has swelled HNGI's capacity in the region to 1,000 tpd, which is expected to help the company serve the southern market better, increase its overall market share from the current 24%, and boost exports, said an official during a recent conference call.

"Even the regional alcohol players in the south are now becoming our customers. The results will show in next few months. We would also be looking at exports as the plant is not far away from Krishnapatnam and Chennai ports," said Alok Taparia, general manager of strategy at HNGI.

The company is a market leader with 50% market share and the only pan-India player in the container glass industry with presence in liquor, beer, pharmaceuticals, food and beverages. It boasts a strong presence in north (53%)and east (96%); but in south, its share is almost half of its average national share.

North has been accounting for over 42% of HNGI's revenues while contributions from east and south were 22% and 19% respectively last fiscal. Exports contribute about 5%.

So far, the southern states got supplies from HNGI's 360 tpd plant at Puducherry in south and Rishra plant near Kolkata in east.

HNGI suffered a loss of Rs 28.5 crore in the July-September quarter against a profit of Rs 16.76 crore during the corresponding quarter a year ago. It continues to grapple with adverse pricing scenario.

"The current environment, marked by unreversing cost pressure and constraints in implementing price hikes, has put HNGI as well as others in the glass manufacturing space in a difficult situation," said Taparia.

The Naidupeta plant is being operated at 70% capacity while the Nasik plant, operationalised in the April-June quarter, is working at full capacity and its efficiencies are being ramped up. Most of the plants are operating at 85-90% levels, he said.

India-wide as well as in south, the liquor industry is growing by 13-14% and the beer segment by about 20%, which could mean prospect of higher revenues for HNGI.


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