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The Rs 1,900-crore Hindusthan National Glass & Industries Ltd’s (HNG) expects its fully-owned German outfit, Agenda Glas — now renamed HNG Global —to break even this fiscal.
The Kolkata-headquartered container glass-maker acquired Agenda Glas for €40 million (Rs 276 crore) in 2011.
According to Laxmi Narayan Mandhana, senior vice-president and chief financial officer, HNG invested an additional €12 million (Rs 83 crore, at current exchange rate) to remove bottlenecks and improve operational efficiencies at the German unit.
“Following additional investments and improvement in operational efficiencies, we are hoping the German unit will break even by the end of this fiscal,” Mandhana told Business Line .
According to Mandhana, increasing the production and reducing the ratio of rejects (in every 100 bottles manufactured), received maximum attention of the new HNG-led management.
Cost-cutting
After the takeover, HNG reduced the rejects from as much as 40 per cent to 23-24 per cent. The aim is to restrict damages within 10 per cent, Mandhana said.
To reduce expenditure, the company streamlined logistics handling operations by shifting warehouses from rented premises to company-owned facilities, closer to the factory.
It also focussed on reducing such contingencies as hotel bills and transportation.
Capacity addition
HNG is looking forward to enhancing capacity at its German unit, once it is back in the black.
“The existing plant has a 320-tonnes-per-day furnace. We might add one more furnace of similar capacity at the existing location at an expected cost of around €55 million (around Rs 380 crore),” he said.
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