PGEL sees wider opportunity in Make in India initiative: MD
PG Electroplast Ltd., which is engaged in electronics manufacturing, plastic injection moulding and assembly of printed circuit boards for large white good brands, is planning expansions in all of its businesses. Managing Director Vikas Gupta, elaborates on the plans.
What is your focus area?
We see a lot of opportunity in the Make in India initiative, especially in our sector. We feel there are good prospects in the consumer appliances segment, and production wise we are aligning our resources accordingly to play a significant role in the coming years.
Currently we have six manufacturing units with presence in sectors like plastic moulding, tool manufacturing, PU paint shop, PCB assemblies and final product assembly.
We are a major manufacturer of washing machines, air conditioners and coolers for clients like LG Electronics, Whirlpool, Haier, Lloyd, Blue Star, Voltas, Carrier, Midea, Godrej, Lava, Flipkart, Reliance Retail, Jabil, Honeywell, Kohler, Jaquar, Orient and Crompton.
In automotive, we are working with Tata, Mahindra and Maruti. We are trying to diversify and move into other industries also. But in the next 2-3 years, our major focus will be on consumer appliances because we see strong traction in that field.
Do you have any plan to come up with your own brands?
We are a third party contract manufacturing company and do not have our own brand. We wish to remain B2B, as having our own brands will be a conflict of interest with our clients.
What is the total investment plan in next 3-4 years and how will you mobilise it?
We are planning to do a capex of almost ₹150-200 crore in the next three to four years.
Apart from existing products, we will be starting LED TV product manufacturing also.
We are trying to fund this expansion through a combination of sources like debt, internal accruals, and some fund raising.
Recently, our board had passed a resolution to raise ₹76.6 crore from investors. Baring Private Equity India AIF, Ananta Capital (promoted by the Taparia family) and the Patni family office are participating through preferential allotment of equity shares of ₹40.30 crore and compulsorily convertible debentures (CCD) of ₹36.30 crore in the company.
Through this funding, the company is planning to expand its plant in Pune, which produces air-conditioners and coolers, and establish a new plant in Greater Noida which will produce air coolers, mobile phone parts and other plastic components. Total investment planned for the expansions is about ₹100 crore for this year.
Through this growth focused funding, we plan to expand our production capacity in manufacturing ACs and coolers. We want to triple the production capacity of AC manufacturing and other products too.
The capacity expansion is in line with the growth envisaged in the segment and will also allow us to comfortably meet the PLI scheme criteria of the Government of India.
What was the turnover in the last fiscal year?
We recorded ₹705.8 crore operating revenue for fiscal year 20-21, a growth of 10% over revenue of ₹641.8 crore during the previous fiscal.
What is the annual growth you are looking at and how many people are you planning to hire?
In the last four years, PGEL has grown at 25% CAGR annually.
We are anticipating a growth of about 25-30% in the current financial year as compared with the last financial year.
Secondly, the number of employees working with us will definitely increase as we are building capacity. Currently we are employing about 2,000 employees overall. We will be hiring more than 500 people in the coming 8-9 months.