Cosmo Films Limited, a manufacturer of bi-axially oriented polypropylene (BOPP), today said it plans to invest Rs 220 crore to expand capacity at its Gujarat and Maharashtra facilities.
"We are installing a new BOPP line with 60,000 tonnes per annum (tpa) capacity by early 2017 at our Vadodara facility in Gujarat. The cost for the said expansion is estimated at Rs 200 crore.
"We are also adding cast polypropylene line at our Maharashtra facility at a cost of Rs 20 crore," Cosmo Films CEO Pankaj Poddar told PTI.
The project will be funded through debt and internal accruals. The line has already been ordered and will increase the company's annual BOPP production capacity to 2,00,000 tpa, Poddar said.
The demand for BOPP film is growing at 12-15 per cent per annum. The company is anticipating a strong demand for BOPP films in the coming years, especially from the FMCG sector, which prompts it to expand its BOPP production capacity.
The output for the production unit intends to be used for both domestic and export markets.
"Our expansion plans are also aligned with government's 'Make in India' project which aims at boosting home grown manufacturing companies," he added.
BOPP films, which offer high strength, elasticity, high barrier properties, resistance to various corrosive environments and inertness, are used in making flexible food packaging, adhesive tapes, labels and lamination applications.
The company is the largest exporter of BOPP films from India and is also the largest producer of thermal laminating films in the world with plant-cum-distribution centres in the US, Korea and Japan and global channel partners in more than 50 countries.
Cosmo Films had set up a US subsidiary with a dedicated sales team, and manufacturing facility in order to cater to the fast growing US market.
"Our US operations have suffered and posted loss last year. With the measures like change in strategy, upgradation of machines and reduction in power cost, we have now registered 15 per cent growth in sales this year and hoping that the operations will improve significantly," Poddar said.
Commenting on future plans, Poddar said the company is now looking at organic growth in the US and Korean markets. It is also opening two sales offices in the UK and Italy in the next 3-5 months period, which will help in increasing exports from the present 35 per cent of volume and 50 per cent of sales for speciality products.