HTW looking at acquisitions in South India

Metal container manufacturer, Hindustan Tin Works (HTW), plans to acquire smaller firms in South India and is currently in talks with a host of potential targets, a top company official said.

"We plan to acquire a company...we are currently in talks with a group of firms to explore the opportunities for acquisition," HTW's chairman and managing director, Sanjay Bhatia told PTI here.

While Bhatia would not disclose further details about the acquisition plans, it is learned that the company plans to fund the acquisition from internal accruals and debt.

The company, which has manufacturing units in Haryana and Maharashtra, plans to launch products in the near future, that will be used for the packaging of processed foods and fruits, Bhatia said.

"We have plans to launch some new products that will cater to the packaging of processed foods and fruits," he said.

The company is currently in talks with three leading lenders — State Bank of India, Punjab National Bank and Standard Chartered, to raise the debt part for the proposed acquisition, Bhatia said.

"We are in talks with SBI, PNB and Standard Chartered for loans. We are also looking at fund raising through the private equity route," Bhatia said.

Presently, HTW has a capacity of 1,63,000 metric tonnes per annum, which is expected to go up to 1,85,000 metric tonnes over the next five years, Bhatia said.

The company, which manufactures 3-piece cans used for food and non-food products, expects 10-15% growth in revenues in the current fiscal, he said.

HTW's clientele includes Nestlé, Asian Paints, Tata Coffee, Heinz, Reckitt Benckiser amongst others.

The company, which has exports to 21 countries including US, Australia, Middle East and Europe, wants to consolidate its export business moving ahead, he said.

It expects revenues from exports in FY10 to increase to Rs50 crore as against Rs36 crore in last fiscal.

"We want to consolidate our export business, hence, are looking at expanding our customer base in the existing countries. We have doubled our exports turnover to Rs36 crore in FY09 from Rs15 crore in the previous year," Bhatia added.

The company, which entered into a joint venture with UK-based Rexam PLC in 2006 to make DWI (Draw Wall Ironed) cans, is the first to manufacturer 2-piece cans in the Indian subcontinent, he said.

The JV has a manufacturing unit at Taloja in Panvel, here and has a production capacity of 120 million cans having 350-500 ml capacity.