Everest Kanto Cylinder starts business in China

Everest Kanto Cylinder, India’s largest compressed natural gas (CNG) and industrial cylinder maker, has bagged its first order in China, said chief financial officer, J Sivakumar.

The $2 million (Rs 8.98 crore) order for 120 jumbo cylinders from a beverage company was won last month and would be executed by the company in this quarter. “There is scope for repeat orders in the coming months,” said Sivakumar.

Jumbo cylinders are used for storage and transportation purposes.

Everest Kanto had got the go-ahead from the Chinese government to sell in the local market a year ago. But the company postponed its plans given the lukewarm demand from the industrial sector and auto original equipment manufacturers.

“We are looking to bag our first order for CNG cylinders from China this year,” Sivakumar said.

Everest Kanto has a plant in China with capacity to make 2,00,000 CNG cylinders and 3,000 jumbo cylinders. The company currently exports cylinders made at the facility, which was commissioned in May 2008.

“In the first year, we will manufacture about 1,000 jumbo cylinders,” Sivakumar said. He said that the company would stand by its decision to expand the capacity of the plant. Everest had planned to double the CNG capacity, but later shelved it.

Nearly, 50-55% of Everest Kanto’s topline comes from abroad. Other than India and China, it has presence in Thailand, Pakistan, Bangladesh, Iran, Egypt, Colombia and Peru, among others.
Sivakumar said the company had also started selling jumbo cylinders in Thailand last quarter. On order inflows, he said, “The frequency of orders has increased. Companies place orders every 3-6 months now, compared to longer-term orders earlier.”

Everest Kanto will have no capex this year for expansion this fiscal, said Sivakumar. The firm had an outlay of about Rs 250 crore for the last two years.