The Ruia Group will go slow on some of its projects, though group chairman Pawan Kumar Ruia says the global economic crisis has not affected the diversified business house's Rs 23-billion expansion plans.
The city-based group, which has interests in infrastructure, electronics, tyre and sugar businesses, said its plan to set up a Rs 4-billion (Rs 400 crore/$78 million) greenfield tyre plant at Chayagaon near Guwahati in Assam may get delayed, but is still on track.
"We have already acquired land (60 acres) for the project. Our project report has been finalised. We have submitted it to banks for consideration. Now we are waiting for banks to sanction the loan," Ruia told IANS in an interview.
He added that the investment size remained unchanged despite the financial crisis.
Though banks and other financial institutions are reluctant to lend these days, the group's earlier plan to inject Rs 22-23 billion for its organic growth was still on, the chairman said.
The company will invest Rs 8 billion in sugar, Rs 10-12 billion in tyre and Rs 3-4 billion for heavy engineering and infrastructure.
The group is building a sugar complex at Shariyatpur in Bihar's East Champaran district. The project will have 10,000-tonne cane crushing capacity per day, an ethanol manufacturing unit with a daily capacity of 240 kilolitres and a 50-MW power plant.
The company already has a sugar plant, Kamlapur Sugar and Industries Ltd, in Uttar Pradesh, with a daily capacity of crushing 4,000 tonnes of cane.
The Shariyatpur complex, set to be completed in two years, is coming up on 180 acres, of which 102 acres have been acquired so far, Ruia said.
"In sugar, work is going on. We have already firmed up things. The only thing is that the time period that we have envisaged earlier has slightly changed," he said.
The company is extremely bullish on its tyre plans.
"Falcon is going for major expansion in Karnataka and Uttarakhand," Ruia told IANS. It is now scouting for land in both states. Falcon has one plant in Karnataka already.
Now, Falcon and Monotona have the capacity to manufacture 950,000 tyres per month. "We expect this to go up to 1.25 million per month within three months," Ruia said.
"We will build a separate plant in Uttarakhand to make two-wheeler and three-wheeler tyres and another small plant in Karnataka."
The group got into the tyre business in 2005 by acquiring Dunlop India and Falcon Tyres. In 2007, it acquired Monotona Tyres at Mumbai and bought controlling stake of electronics company Industronics Berhad in Malaysia.
In 2008, the company acquired British auto component company Schlegel Automotive Europe.
The group is looking at a few overseas buys soon, Ruia said, but declined to give details.
Asked what made him think of acquisition at this time of economic turmoil, Ruia said valuations of many companies have plummeted owing to the economic crisis, making the price favourable for buying.
On the company's planned Rs.500-million investment to kickstart a 10-MW captive power plant in Dunlop, Ruia said: "If everything goes well with Dunlop, then the project will come up soon."
Dunlop declared suspension of work at its Sahaganj plant in West Bengal's Hooghly district on Nov 30 last year, but reopened on March 6.
Falcon and Monotona produce two-wheeler, three-wheeler and light commercial vehicle (LCV) tyres, whereas Dunlop produces
four-wheeler and truck tyres, off-the-road (OTR) and industrial products.
The company will focus more on OTR and truck tyres this year, Ruia said.
The group expects its turnover to rise to Rs 20 billion this fiscal from from Rs 15 billion in 2007-08.
Ruia acquired sick heavy engineering and infrastructure company Jessop and Co in 2003 and turned it into a profit-making business.
"We have done a lot of restructuring in Jessop. This is one company which in this meltdown is not seeing any loss of orders," Ruia said.
"We are in the process of building up a nice management team," he said, adding that Jessop now has an order book of Rs 4 billion to be executed over the next two years.