> Ess Dee Aluminium (SUNIDHI)

Company Description:
Incorporated in 2004, EDAL manufactures aluminium foils and polyvinyl film-based packaging products. It also manufactures thermoforming polyvinyl chloride films (rigid PVC films) as well as PVdC (polyvinylidene chloride)-coated PVC barrier thermoforming films for blister packaging. Along with subsidiary Flex Art Foil, it provides endto- end packaging solutions to the pharmaceutical end users.

During December 2006, EDAL tapped the capital market to raise Rs 157 crore at a price of Rs 225 per share. Its recently acquired India Foils (IFL) manufactures laminated flexible packages, aluminium foils and aluminium container sheets and light gauged strips and processed laminated paper, paperboard and containers.

Highlights:

During 2007-08, the company increased the capacity of cold rolling from 9, 100 MT to 18, 000 Mt to cater light gauge and ultra light gauge foil suitable for the Food and FMCG sectors.

IFL has installed capacity of 18,000 tpa and hence the combined capacity will be 36,000 tpa. This will put EDAL in a commanding position in the domestic market.

EDAL acquired a 90% stake in IFL for Rs 120 crore from Vedanta Group, making it a subsidiary. The remaining 10% stake is with Vedanta. EDAL raised Rs 84 crore in Sept 2007 via preferential issue of shares at a premium of Rs 565 per share from Morgan Stanley Mutual Funds.

EDAL has launched cold forming alu-alu foil in the premium segment as an import substitute product. EDAL’s alu-alu foil is around 40% cheaper than the imported material and hence the company is likely to garner a good market share. Moreover, it will have a first mover advantage.

EDAL has also entered into flexible packaging and metalised PVC films for its FGCG customers. The major customers include: ITC, HUL, Nestle, Cadbury, Perfetti, Hindustan latex etc. With the entry into FMCG segment the ratio of pharma: FMCG sales are likely to change from 90:10 in FY08 to 60:40 in FY09 (with India Foils).

EDAL is currently exporting to countries like Chile, Ghana, Cost

To see full report: ESS DEE ALUMINIUM