USL to invest Rs600cr in glass plants

MUMBAI: Vijay Mallya-led United Spirits (USL) will invest around Rs 600 crore to set up glass manufacturing plants, as the world's largest liquor firm by volume tries to rein in volatile input costs.*USL is probably the biggest user of glass bottles by tonnage with its volume sales crossing 112 million cases (of 9 litre each) in the current financial year.

India's glass industry, which is dominated by players like Hindustan National Glass (HNG), has increased the prices by 10-12% in the last few months.

"We are planning to invest Rs 500-600 crore into glass (bottle) manufacturing. We are talking overseas for light weighting technology, and will move ahead once this is finalized," said Ravi Nedungadi, president & CFO, UB Group, a diversified beer-to-airline conglomerate. The group's flagship USL controls around 55% share of India's branded spirits industry.

He said the move was part of a strategy to gain direct control over some of the key inputs such as extra neutral alcohol (ENA) and glass-the soaring prices of which could hurt the profitability. "There are tremendous cost savings to be achieved straight away. USL is now a juggernaut in an industry which is witnessing robust volume growth," Nedungadi added.

600450 USL to invest Rs600cr in glass plants
Date: 24 March 2011

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