Emami invests Rs 3,500 cr in business portfolio

Kolkata, May 05: Emami Group has embarked upon a massive diversification plan, investing Rs 3500 crore in paper, hospital, retail, real estate, cement, power and bio-diesel sectors in the next two to three years, besides the FMCG sector, the company's core business.

Speaking to UNI, Emami Group Director Aditya Agarwal said here yesterday that the company had identified 'realty' as another potential business opportunity. A wholly owned subsidiary called "Emami Reality" had been floated to lead this business.

'' The newly formed 100 per cent subsidiary will also give realty business an independent and separate focus apart from utilisation of Emami's war chest, '' he said.

The "realty" sector would be the "mantra" to enhance profitability and shareholders' wealth, though the company would not move away from its core FMCG business, he added.

A few projects, involving development of IT park, shopping mall, residential complexes, had been identified. These projects would also help utilise Emami's idle resources in higher return generating business, he said.

Elaborating the company's plans in the healthcare sector, he said, '' The Advanced Medicare&Research Institute Limited (a joint sector with West Bengal government) will come up with a new 300-bed hospital near Mukundapur in South 24 Parganas. '' '' At present AMRI Hospitals has 530 beds. With addition of the new hospital, the number of beds would go up to 830. The new hospital will facilitate various specialty treatment for women and children. A special orthopedic cell would be opened which would offer treatment to patients of all age groups, '' he stated.

With a major thrust on the healthcare sector in the eastern region as a whole, the company had chalked out plans to set up multi-facility hospitals in four state capitals of eastern India Ranchi, Bhubaneshwar, Raipur and Patna.

'' The total investment for these facilities will be around Rs 320 crore. In addition to 200-bed hospitals in each place, there will be medical college and nursing institute as well, '' he said. Elaborating its plans about the FMCG business, Mr Agrawal said, '' Emami Limited is our flagship company. We have started our business as FMCG manufacturing company and every year we launch six to seven new products in the market. This year also we are planning to launch a range of ayurvedic medicines and products in babycare range. For the existing products, there will be brand extensions in respective categories. '' '' Emami is a cash rich company with YOY profitability of over Rs 50 crore. The yearly profit is arrived at after deducting brand investment of over Rs 100 crore, '' he said.

'' In addition, it has a war chest of over Rs 100 crore of which Rs 80 crore is invested in liquid asset and has tremendous borrowing potential. Emami is therefore looking for inorganic opportunities to add further aggression to FMCG business, '' he informed.

'' Diversification seems to be the new route of business expansion for Emami Group. The company would set up a Rs 500-crore newsprint manufacturing unit in India. The unit would have a capacity of 500 ton per day. The new plant would be funded partly through internal accrual and partly by borrowing from Banks and financial institutions at a debt equity ratio of 2:1, '' he iterated.

Emami Paper Mills Limited had also undertaken an expansion plan in its existing unit at Balasore, he said adding it expected 70 per cent of its turnover to come from this segment alone and was also mulling an entry into the power sector in the future.

UNI