Cosmos Films to invest Rs. 200 cr in new polypropylene line.

Cosmos Films, a leading packaging solutions provider, plans to invest Rs. 200 crore to put up a new line for producing 65,000 tonnes of bi-axially oriented polypropylene (BOPP) films at its existing facility at Vadodara.

The capacity addition will take the company’s production of BOPP films, which is used for packaging, labels and laminations, to 201,000 tonnes. The company intends to raise a debt of Rs. 140 crore and fund the rest from internal accruals.

The company will also add a new cast polypropylene line with an investment 10 crore to tap the market serviced largely by converters and small companies.

With an earning before interest, tax, depreciation and amortisation of Rs. 49 crore and debt of Rs. 450 crore, the debt, equity ratio stands at 1:2.25.

Speaking to BusinessLine, Pakaj Poddar, CEO, Cosmo Films, said with the completion of the new line by January 2017, the company would emerge the largest producer of BOPP in India, which has an annual production capacity of five lakh tonnes.

'Plastic is fast replacing paper as preferred packaging material due to its in-built quality to resist moisture. It is also cheaper compared to paper and can be recycled many times,' he said.

The company will soon launch an innovative product Direct Thermal Printable Films. The specially quoted films are water and oil resistant and can be used as baggage tags in aviation sector and printing any bills that needs to retained for long.

“We are ready with the commercial launch, but we are working on means to reduce cost. Initial feedback from the customers has been very encouraging,' said Poddar.

The company has managed to reduce its debt by almost Rs. 200 crore in the last two years.

HBL