Sep. 13, 2010 - IFGL Refactories has acquired two US based factories for Rs 59 crore. Kamal Sarda, the COO of the company, in an interview, spoke about their expansion plans and his outlook for the company.
Q: Just to get a couple of the specifics, this USD 13 million, how will you be funding it and what to these two acquisitions bring on the table for you all in terms of revenues?
A: The acquisition will be partly funded by equity and partly debt, the major portion would be debt. As far as the deal is concerned, the company which we have acquired also manufacturers isostatically pressed continuous casting refractory which is one of the major product group of IFGL Refractories at present. That brings in the synergies, the product.
The other synergy is the market. It's an American company pre dominantly in the American market especially in North America. South and North America put together they contribute about 150 million tonne of steel and that has been a bigger market for us.
We have been targeting that market for the last decade or so. One of the major reasons why we acquired was this company has good technology and also the logistics issue. We have separate set of customers as of now. We can cross sell the product and increase our presence both in North as well as South America.
Q: What is the sales profile of both these companies that you have acquired and how much are you looking at adding in your FY11 topline through these inorganic moves?
A: At the current level, in the half year they had about USD 6.5 million. We expect to add about USD 13 million to USD 14 million this year and we hope it would substantially increase after we have absorbed everything.
Q: You did about Rs 415 crore on a consolidated basis in FY10. How much can you scale it up assuming these add about Rs 60 crore? Apart from that how is the core business shaping up in percentage terms, could you quantify your revenue growth?
A: We are looking at an average revenue growth of 15% to 20% on the current operations.
Q: Ei Ceramics which is one of the companies you acquired is operating at half the capacity, is there any particular reason, is demand a little sluggish and you also spoke about ramping up production at these two buy s. Could you walk us through the game plan?
A: Ei Ceramics operates at about 5,000 to 6,000 pieces per month and their current capacity is about 8000 pieces. Ramping up capacity means debottlenecking, adding some of the equipment and all sort of stuff. They are into very niche mid-steel producers and by adding some more capacities we can go into large steel producing in the American market both in South and North America.
Q: Just to get a couple of the specifics, this USD 13 million, how will you be funding it and what to these two acquisitions bring on the table for you all in terms of revenues?
A: The acquisition will be partly funded by equity and partly debt, the major portion would be debt. As far as the deal is concerned, the company which we have acquired also manufacturers isostatically pressed continuous casting refractory which is one of the major product group of IFGL Refractories at present. That brings in the synergies, the product.
The other synergy is the market. It's an American company pre dominantly in the American market especially in North America. South and North America put together they contribute about 150 million tonne of steel and that has been a bigger market for us.
We have been targeting that market for the last decade or so. One of the major reasons why we acquired was this company has good technology and also the logistics issue. We have separate set of customers as of now. We can cross sell the product and increase our presence both in North as well as South America.
Q: What is the sales profile of both these companies that you have acquired and how much are you looking at adding in your FY11 topline through these inorganic moves?
A: At the current level, in the half year they had about USD 6.5 million. We expect to add about USD 13 million to USD 14 million this year and we hope it would substantially increase after we have absorbed everything.
Q: You did about Rs 415 crore on a consolidated basis in FY10. How much can you scale it up assuming these add about Rs 60 crore? Apart from that how is the core business shaping up in percentage terms, could you quantify your revenue growth?
A: We are looking at an average revenue growth of 15% to 20% on the current operations.
Q: Ei Ceramics which is one of the companies you acquired is operating at half the capacity, is there any particular reason, is demand a little sluggish and you also spoke about ramping up production at these two buy s. Could you walk us through the game plan?
A: Ei Ceramics operates at about 5,000 to 6,000 pieces per month and their current capacity is about 8000 pieces. Ramping up capacity means debottlenecking, adding some of the equipment and all sort of stuff. They are into very niche mid-steel producers and by adding some more capacities we can go into large steel producing in the American market both in South and North America.
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