Phoenix Yule to Expand Capacity by 60 per cent

(India/Rubber Asia) India’s largest manufacturer of steel cord reinforced converyor belts, Phoenix Yule, has announced plans to expand its capacity by as much as 60 per cent. Phoenix Yule is the company created by the privatisation of the conveyor belts division of the public sector Andrew Yule. According to Rubber Asia, currently 74 per cent of its 460 million rupee (£5.26 million) paid-up equity capital is held by Phoenix of Germany, while the rest is with the Government.

The company produces 6,000 tonnes of synthetic textile reinforced belts and 4,000 tonnes of steel cord reinforced belts. It is only Indian supplier of the latter variety – almost all of the Indian demand is met by the company.

Mr T.K. Mukherjee, managing director, told Business Line last week that the company, anticipating demand growth, plans to expand its steel cord reinforced belt capacity by 6,000 tonnes at a cost of 250 million rupees. In other words, it is expanding its capacity for this product by 150 per cent and its overall capacity by 60 per cent.

The plant and machinery for the expansion project would come from the German partner, which has just closed down one of its three plants in the country.

In 2005-06, Phoenix Yule’s turnover stood at 1.7 billion rupees; Mr Mukherjee expects the company to end the current year with sales exceeding 2.1 billion rupees.

Would the German promoter be interested in buying the other 26 per cent of equity from the Government? Mr Mukherjee said that the decision to sell its stake was up to the Government, but added that the Government had indicated its willingness to sell “residual holdings” in privatised companies such as VSNL and Balco.