The Hindu Business Line : Jain Irrigation to invest Rs 350 cr for expansion

Jalgaon, Oct. 1 Despite the turbulent market conditions, Jain Irrigation Systems Ltd will invest Rs 350 crore in the financial year 2009 to increase pipe manufacturing and irrigation systems capacity besides exploring new opportunities in the North. Mr Anil B. Jain, Managing Director, Jain Irrigation, said the World Bank has agreed to lend $60 million after considering the environment-friendly projects the company undertakes. The remaining fund will be raised through internal accruals and term loans from banks at competitive rates. After recently acquiring 1,250 acres near Coimbatore in Tamil Nadu, the company is planning establishments in the North especially in Punjab, Haryana and Uttarakhand. The company has a land bank of over 2,500 acres in Maharashtra, Tamil Nadu, Andhra Pradesh and Karnataka.

“We will set up agriculture R&D centre for tissue culture fruits, soil testing, besides food processing centre and pipe manufacturing facility,” said Mr Jain.

The company is also raising the polyvinyl chloride (PVC), polyethylene (PE) pipe and PVC sheet manufacturing capacity in Jalgaon to 67,826 tonnes this fiscal from 49,721 tonnes last year, while agro processing (onion, banana and mango) capacity will go up to 38,542 tonnes FY’09 from 3,600 tonnes logged last year.

With expansion plans laid out, the company targets a turnover of Rs 3,200 crore in FY’09 against Rs 2,400 crore achieved last fiscal. About 50 per cent of the turnover comes through irrigation systems, 30 per cent from pipe, while food processing accounts for the rest. “We have registered a compounded annual growth rate (CAGR) of 50 per cent last few years. However, given the tough times ahead, we have tempered our CAGR to 40 per cent for the fiscal 09,” he said. Ruling out a slowdown in demand for fruit pulp in the overseas markets due to the financial crisis, Mr Jain said essential commodities especially food articles will always be on demand.

Energy Park

Energy being the major cost of operation, the company is in the process of developing Energy Park which will efficiently tap the solar power and generate power through biomass gas. On a pilot basis, a biomass gas power plant of 1.5 MW is under construction in the Energy Park. Jain Irrigation has also appointed consultants to study the possibilities for claiming carbon credits from various projects such as vermiculture, biomass and green belt it has developed.