Finolex Industries Eyes $1 Billion Sales By 2020, To Double Capacity

Finolex Industries Ltd., the largest PVC pipes and fittings manufacturer in the farm sector enjoying 70 percent of the organised market pie, has set a $1 billion revenue target and to double its capacity by 2020.

The Pune-based company currently nets around 70 percent of its revenue from farm-oriented pipes and fittings, but expects to increase the non-agri revenue share to 50 percent from 30 percent now as it shifts focus to the residential and commercial properties segments, given the government thrust on housing, says its executive chairman Prakash P Chhabria.

For the year to March 2017, the debt-free Finolex had reported Rs 2,987.6 crore revenue, up 5 percent over fiscal 2016, while its profit jumped over 38 percent to Rs 352.2 crore on an EBITDA growth of over 39 percent at Rs 563 crore.

“Currently only 30 percent of our revenue comes from this, which I want to increase to 50 percent over the next three years. Agri pipes and fittings get us 70 percent of revenue now,” Chhabria said.

Chhabria says a good portion of the incremental sales from the non-agri side will come from their recent tie-up with the Cleveland, U.S.-based Lubrizol Corporation under which Finolex will manufacture and sell the FlowGuard branded CPVC pipes and fittings in the domestic market.

The companies inked the tie-up in February this year.

The CPVC pipes and fittings can service the hot and cold water plumbing markets and cater to the building and construction industry.

Lubrizol is the inventor and largest manufacturer of CPVC (chlorinated polyvinyl chloride resins and compounds) worldwide.

Finolex has three plants in Pune and Ratnagiri in Maharashtra and Masar in Gujarat, which together produce 2.72 lakh tonne PVC resins and 2.9 lakh tonne of pipes and fittings per annum. By 2020 both these capacities will double.

The domestic PVC pipes and fittings market is around Rs 30,000 crore with as many as 1,000 players, but only a third of it is in the organised segment with an annual value of around Rs 10,000 crore, says Chhabria adding that herein lies the biggest challenge — fighting these unorganised players.

Among the organised players, Finolex is the largest with 20 per cent market share.