Lanco industries to invest Rs 325 crore in capacity addition

Kolkata: Lanco industries, an associate company of Electrosteel Castings, has lined up a Rs 325 crore expansion plan to manufacture ductile iron pipes of smaller diameter. The company, a leading South-based pipe maker, will add a capacity of one lakh tonne of pipes in the size range of 100 mm to 300 mm.

The new project will take Lanco's total capacity to 3.25 lakh tonne per annum. The investment includes increase in capacity of the mini blast furnace from 250 to 280 cubic metre and other supporting facilities. The entire project will be funded by internal accruals and debt, director Lanco industries, Mr G S Rathi said.

The expansion project will be completed within 18 months and the new facility is likely to be commissioned by March 2016, Lanco industries said in a media statement.

Ductile iron pipes are mainly used in transporting water. Post expansion, the company expects to be able to fully meet demand for smaller diameter water pipes from water boards, public health engineering departments and corporations, as well as, other water infrastructure projects of various institutions in the southern and western region.

The company's ongoing Rs 100 crore project of raising the capacity of its existing ductile iron plant by 50,000 tonne per annum is expected to be operational by January 2015. The company's board has also approved the change in name of the company to Srikalahasti Pipes from Lanco Industries.

The company posted a net profit of Rs 12.84 crore in the quarter ended June 30, 2014 against a profit of Rs 3.5 crore in the previous corresponding period. Income from operations touched Rs 216.97 crore in April-June 2014 against and income of Rs 220.99 crore in April-June 2013.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.