— PHOTO: R. RAGU

WIDER OPTIONS: N. Sankar (left), Chairman, Sanmar Group, and Vijay Sankar, Deputy Chairman, addressing a press conference in Chennai on Friday.

CHENNAI: The Sanmar Group is confident that it would scale the Rs. 5,500-crore turnover-mark by 2009-10, by which time, the group's profit before tax would have grown to around Rs. 800 crore. The group's turnover stood at Rs. 1,596 crore in 2006-07 and profit before tax at Rs. 269 crore.

Addressing a press conference here on Friday, Vijay Sankar, Deputy Chairman, said the Sanmar Group had already committed an investment of around Rs. 4,000 crore. The group, he said, was projected to grow at a compounded annual growth rate of 51 per cent over the next three years. "This will be built on a combination of greenfield investments, brownfield expansion and acquisition," Mr. Vijay Sankar said. The Deputy Chairman reiterated the group's philosophy of never compromising on margins.

This is, perhaps, the first time that Sanmar is coming out with composite numbers for the group. This comes in the wake of two major buys overseas, signalling a radical transformation in the group. "We are a privately-owned group, but professionally managed one," N. Sankar, Chairman of the group, said.

Mr. Sankar said the group's investment in Trust Chemical Industries (TCI) of Egypt would be in excess of $550 million, including the acquisition cost of $300 million. The group had obtained a bridge loan of $300 million from ICICI Bank to fund the acquisition, which was completed in March. The TCI plant at Port Said in Egypt had a capacity to produce two lakh tonnes of caustic soda, 1.80 lakh tonnes of chlorine and about 4,900 tonnes of hydrogen. Sanmar had already kick-started an expansion plan for TCI that would see its caustic soda capacity go up by another 75,000. Further, it was proposed to put up an ethylene dichloride (EDC) facility with a capacity of 2.20 lakh tonnes.

There was also a plan to produce four lakh tonnes of vinyl chloride monomer (VCM). A part of this (two lakh tonnes) would be used to make PVC at a new facility in Egypt. The balance would go as feedstock for the Sanmar group's Rs. 520-crore two lakh tonne-capacity greenfield suspension PVC project at Cuddalore.

The Chairman said the group had taken management control of Eisenwerk Erla, a modern facility in Germany specialising in turbo-charger housings for automobiles and integrated manifolds. "We have a great front-end," Mr. Vijay Sankar said.

To support the German foundry, the group had decided to set up a greenfield foundry in India, he added. This would be up and running in a year, he said.

Chemplast Sanmar, the lone listed company in the group, had, in the meanwhile, reported sales and other income of Rs. 706.07 crore for 2006-07, up from Rs. 681.09 crore. The profit after tax stood at Rs. 23.19 crore (Rs. 36.71 crore). Mr. Vijay Sankar said the dip in the profit was due to the inclusion of Montreal Protocol compensation of Rs. 16.71 crore relating to the phase out of carbon tetrachloride and other similar allocations. In view of the ongoing expenditure programme, the board of the company had decided to skip the dividend for 2006-07.

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