Uflex to complete overseas expansion by FY21, expects foreign contribution to go up

NEW DELHI, Feb 23: Country’s leading packaging company Uflex expects to complete its international expansion plan by next financial year, that will result in an increase in overseas contributions to the total revenue in the coming years, a company official has said.
Uflex has made an investment of USD 301.7 million (approx Rs 2,167 crore), which includes – USD 86.5 million in Nigeria, USD 81.2 million in Hungary and USD 75 million in Russia. Besides, it has also invested USD 59 million on capacity expansion in Poland.
“We are going to complete our expansion, which we have announced. FY21 is going to be another defining year as we would commission our new projects and look for higher revenues, profitability,” Uflex Global CFO Rajesh Bhatia said.
In 2018-19, Uflex had reported a consolidated revenue of Rs 7,957.22 crore and standalone revenue of Rs 4,220.97 crore, which consisted mainly of domestic revenue.
Besides, ramping up overseas expansion, Uflex is also focussing on capacity utlisation of the domestic manufacturing units at Noida, Jammu and new unit at Sanand, Gujarat and expects the domestic business to grow as well.
The Noida-headquartered company aims to have a ratio of 55:45 between domestic and foreign contribution to its total revenue in the next two years.
“We would have 45 per cent from overseas market and 55 per cent from the domestic market… This would happen in two years,” Bhatia said.
“Though in the foreign market, we are implementing projects, but at the same time, we will also have improvement in the capacity utilisation in India. Like our Sanand facility, is expected to do Rs 1,000 crore business itself,” he added.
In the overseas markets, Uflex produces plastic films only, while in the domestic market, it also manufactures packaging materials for several companies besides other products.
Uflex, is shifting one of its production line from its Dubai plant to Russia. This would help the company save freight cost, he said.
“Given that the energy prices are lower and there would be no sea freight from sending it from Dubai to Russia and there would be no import duty, all that augurs well for the margin,” he said.
The company is also expanding its Poland-based facility, which is operating at its full capacity from the past few years.
“Initially we announced expansion of Hungry and Nigeria because the African market are the future for us,” he said adding “Nigeria has a huge population and has an import consumption of poleyster films but there was no plant there and we were first one to latch that opportunity.”
Set up in 1985, Uflex has packaging facilities at multiple locations in India with installed capacity of around 1,35,000 TPA and has packaging film manufacturing facilities in India, UAE, Mexico Egypt, Poland and USA. (PTI)