Hindusthan National Glass & Industries (HNGIL) has commissioned the world's largest single site 650 tonne per day container glass furnaces at Nashik (in Maharashtra). As a result, the company's total glass capacity has increased to 3700 tpd. The company looks to expand its glass capacity further to 4400 TPD by the end of FY2012-13.

Mukul Somany, Managing Director & Vice Chairman of HNGIL quoted, “The commissioned Nashik plant along with the expected commissioning of Naidupeta (in Andhra) plant in Q2FY13, will facilitate improvement in company's market share in Indian container glass industry from about 40% in FY2011-12 to about 47% in FY 2012-13. The market share is expected to expand to about 52% in FY 13-14.”

The Nashik plant was set up at a cost of Rs 725 crore has a total of six production lines installed with state-of-the-art technology to produce glass in world's largest end fired container furnace. Of the total cost about Rs 565 crore is debt and balance are by way of equity.

Commenting about the group company HNG Float Glass (HNG float), Mukul Somany said, “ the management is taking continuous efforts to improve efficiency as well as realisation and with this HNG Flot is expected to turn EPS accretive in FY2012-13.”

Germany is the largest container glass market in Europe. HNGIL acquired the Germany based Agenda glass, which has a container glass capacity of 320 tpd. The acquisition was made w.e.f. 01-08-2011 through HNGIL's 100% subsidiary. The group is taking active steps to turnaround Agenda Glass operations with stustained efforts to strengthen order procurement, improving capacity utilisation and other cost optimisation measures. The revenue for Germany business for last year (period of 8 months) was EUR 18.8mn and EBITDA of EUR 5.9mn. The German operations are expected to contribute positively to the bottomline by FY13.

The present capacity of the Indian operations (excluding German Plant capacity) of Hindustan National Glass, including Nashik II plant, is more than 3700 TPD. The company has embarked on setting up a greenfield plant with a capacity of 650 TPD in Naidupeta at a cost of Rs 800 crore of which the debt component is Rs 560 crore with balance being equity. The company has achieved financial closure for this project. In addition to this the company is also looking at rebuilding of its existing furnaces which will take the HNGIL's capacity to around 5000 tpd by FY15. The financial closure for rebuilds would be done as and when they are due.

Hindustan National Glass recorded fall in operating margins sequentially from 17.9% in the quarter ended June 2011 to 16.5% in the quarter ended September 2011, which scaled down to 14.8% in the quarter ended December 2011 and to 14.1% in the quarter ended March 2012. Eventually, the company recorded 110 basis points fall in margins to 15.8% in FY 2011-12 from 16.9% in the previous year.

The company witnessed sharp rise in input costs like soda ash and power and fuel costs. It was absorbing these rise in costs, leading to pressure on margins. Finally, the company has hiked its glass product prices by about 8% from February 2012. This price hike can help the company to report sequential improvement in margins from the quarter ending June 2012.