Tin can manufacturer Hindustan Tin Works (HTW) has initiated talks with private equity funds to raise capital to fuel its expansion plans. The company plans to expand its production capacity and set up more plants across the country.
“We are in touch with private equity players,” said Sanjay Bhatia, Managing Director,
Hindustan Tin Work (HTW), told VCCircle. The Delhi-based firm plans to close its fund-raising exercise by March. Bhatia declined to comment on the quantum of funds the company is looking to raise.
The firm, which has a plant in Murthal in Haryana, is looking to set up new units near ports or near its market in South or West India.
HTW’s sales stood at Rs 244.3 crore in FY09 compared to Rs 185.4 crore in FY08. HTW has doubled its export turnover to Rs 36.83 crore in the financial year ended in March 2009, from Rs 15.30 crore.
Over the last few years, the firm has pushed exports to 20 countries. It supplies cans to Nestle, Tata Coffee, Parle, Novartis, Asian Paints, among others. HTW is expecting sales of Rs 270 crore this year, with around Rs 50 crore coming from exports.
According to the India Food Report 2008, the Indian food industry has been estimated at over $182 billion, and it is expected to grow at 14%. Packaging will play an important part of this growth.
Another factor working for this industry is the number of overseas players looking to enter the Indian market, points out Bhatia. Case in point is US firm Abbott’s acquisition of Wockhardt’s nutrition business, which is a client of HTW. The total size of metal packaging industry in India is pegged at Rs 3,000 crore.
HTW, which was till now mainly focusing on packaging for food products, is also looking to make cans for other products now like beverages and aerosol cans. The company has entered the beverage space by forming a joint venture with UK-based Rexam plc, the largest beverage cans manufacturer in the world.
HTW owns a 49% stake in this venture, while the rest is held by Rexam, and the unit started commercial production last year. Rexam HTW Beverage Can (India) Ltd makes cans for carbonated soft drinks and beer and has a plant in Mumbai.