Hindustan Inks gets RBI nod to infuse $30-m equity into US arm

Anindita Dey & Sambit Datta

Mumbai, Dec 2: The Rs 384-crore Hindustan Inks and Resins has received permission from the Reserve Bank of India (RBI) for an equity infusion of around $30 million (Rs 143 crore) into Micro Inks Corporation -- its wholly-owned subsidiary in the US.

The move assumes significance in the light of the company’s strategy to steer and expand Micro Inks Corporation. According to sources, the additional capital will be utilised for expanding the equity base of Micro Inks Corporation which was incorporated to manufacture a variety of printing inks for the US printing industry.

Sources further added that the additional funding would help the company meet its sales target of $50-60 million by March 2002. The funds will be invested in equipment, working capital and other logistics required to meet the sales target.

The sales in US operations is picking up very fast and at present hovering around $8-9 million per month, said official sources.

He also added that the company has been able to obtain a strong response for its products in the US market and has already, within a short period, garnered orders worth $100 million for the next four years. The company recently launched its Sheet Fed range of inks and UV/EB inks in the US market.

It has also commenced marketing in Europe which has received an encouraging response, he added.

The company thereby expects to enhance the sales in the US market substantially and garner a reasonable market share of $4-5 billion.
For concentrating on the overseas market, the company will focus on three major geographical regions -- the US, Europe and Japan.

For other parts of the world the company plans to export some select products like Sheet Fed inks. The company will also focus on export of raw materials for ink industry like adhesives, flushed pigments, synthetic resins and wire enamels.

Hindustan Inks and Resins has already invested Rs 71 crore for setting up a single stream ink plant at Vapi in Gujarat where it expects to commence operations this week.

This 100-per cent export oriented unit (EoU) has a capacity of one lakh metric tonne of inks and 30,000 metric tonne of flushed pigments per annum.

Its resin facility is also being expanded by 25,000 metric tonne. Last year, the total turnover from exports stood at Rs 93 crore, whereas this year in the first quarter the company’s export has reached a level of Rs 66.26 crore.