Company Watch

EDAL acquires majority stake in India Foils

Usha Sharma - Mumbai

ESS DEE Aluminium Ltd (EDAL), a leading manufacturer and supplier of Aluminium foil and PVC based primary packaging company, has recently acquired an 85-90 percent stake in India Foils Ltd (IFL), a Vedanta Group Company, thereby, making it a subsidiary. The company was waiting from long to finalise this deal for commencing its Sikkim printing unit. EDAL will start its full fledge commercial operation from April 2009.

Sudip Dutta, Chairman and Managing Director, EDAL, said, “IFL enhances EDAL’s rolling capacity from the existing 18,000 tonnes to 37,000 tonnes, spread across five manufacturing facilities, thus, making it India’s largest pharmaceutical foil manufacturing company. At the same time, it also places EDAL on track to achieving self sufficiency in raw material requirements once the foil stock plant located at Hoera is restarted. Addition of IFLs manufacturing facilities in West Bengal would add strength to EDAL’s successful hub and spoke model of manufacturing and printing foil based products with plants spread across the country.”

For the above deal, EDAL was advised by Enam Securities, M P Chitale, DFK Consulting Services India and Kanga for the transaction. “We have partially raised funds from internal accruals and from private equity of Morgan Stanley. We are quite financially stable in our field,” Dutta added.

Debdeep Bhattacharya, Director, said, “For our Sikkim facility we have invested approximately Rs 25 crore. Our facility’s construction work is almost done and we were just waiting for this deal. IFL will become a hub and all required printing work will be finalised at Sikkim. This deal will help us in time consistent manner with better way to serve our clients.”

IFL has the unique distinction of having innovated and developed every foil specification used in packaging in India. IFL is engaged in the businesses of manufacturing, processing and selling of aluminium foil and foil based products. The company has three manufacturing facilities located in West Bengal with total foil rolling capacity of 19,000 tonnes backed by adequate front end conversion capacity that allows it the flexibility to offer value added products. The company was declared sick in the year 2006 and two plants out of three were shut down.

EDAL and Malco have joined hands to revive IFL. As part of the rehabilitation scheme approved by the Board for Industrial and Financial Reconstruction (BIFR) vide for the revival of IFL and both plants, the company has infused about Rs 261 crore in the form of equity and preference shares to repay all existing lenders of IFL, making it debt free. The shutdown foil stock and rolling plant located at Hoera will also be restarted using the funds infused. The net worth of the company has become positive upon fund infusion. The revival of plants will be commenced shortly.

Sharing his view on future financial status, Bhattacharya, said, “We are registering almost 100 percent growth rate. For the financial year 2008-09, we are hoping to achieve more than double turnover of the last year. Our child resistance and Alu Alu packaging have obtained drug master files and with the help of these we are eying US and Europe. In another one years time we will be having strong presence in the South East Asia and Middle East market.”

u.sharma@expressindia.com