Somany to commence its Andhra unit this year

Somany to commence its Andhra unit this year

Somany Ceramics will commission its Andhra plant in the fourth quarter of this financial year and the plant will have a capacity of 4.2-4.3msm. The plant will mainly manufacture glazed vitrified tiles (GVT). The company is also planning to commission the expanded capacity in its JV company, Vicon by this Diwali. It has recently added a new JV (Amora Ceramics Pvt. Ltd.) with 3.3 mn sq. m. tiles capacity at Morbi. The company has lined up a capex of Rs 65 crore for the current financial year.

During last financial year Somany has added a total of 326 dealers, taking the company’s network to 2,000 dealers and 200 exclusive showrooms.

Post introduction of GST, Somany faced with Rs 8 million of monthly tax outflow on fuel expenses in Haryana due to lack of tax set-off benefits which was available under the earlier VAT regime. This issue has now been sorted out by the Haryana government and the extra outgo has stopped from May 2018. However, the company will not get set-off benefit for the period July 2017-April 2018. It may be noted here that Haryana has seen a sharp surge in gas prices (Rs 35-36/scm vs Rs 23-24 last year) due to rising crude prices. However, the impact on gas prices in its Gujarat facilities has been on the lower side (Rs 27/scm vs Rs 25 last year) due to cross-subsidies by the Gujarat Government.

 

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