AIA Engineering to invest Rs 200 cr

NEW DELHI: Ahmedabad-based chrome parts maker AIA Engineering Ltd has said it plans to invest about Rs 200 crore over the next two years for increasing its manufacturing capacities and setting up a captive power plant.

"We would be investing about Rs 75 crore to set up a new plant near Ahmedabad. Besides, we have decided to set up a 30 MW captive power plant at an investment of about Rs 125 crore," AIA Managing Director Bhadresh Shah said.

Shah said the greenfield plant would add 52,000 metric tonnes manufacturing capacity to the company's existing capacity of about 65,000 metric tonnes.

The plant would be operational by December this year, he said, adding it would be a 100 per cent Export Oriented Unit. Exports contribute about 45 per cent of total sales at present and this was expected to rise in future, he said.

Shah said the power plant could either be run on coal or lignite. The company has initiated talks with Gujarat government for fuel linkage. The plant could be located near Mundra or Bhavnagar ports and run on imported coal, he said.

While the company would fund the manufacturing project from the resources raised during its initial public offer in December last year, it might go for a bond issue or raise loans to set up the power plant. The company has so far spent about Rs 42 crore out of the Rs 148 crore raised from the IPO.

AIA Engineering, which makes high chrome parts for use in power, mining and cement plants, today reported a 97 per cent jump in net profit to Rs 52 crore for 2005-06.

Total income has risen 39 per cent to Rs 417.3 crore, Shah said, adding the Board of Directors have approved a dividend of 25 per cent for shareholders.