JBF IND

Q:Could you give us more details on the plant and how and when do we see revenues coming in?

A: JBF is a producer of polyester chips and Partially Oriented Yarn, POY.We have a current capacity of 1,20,000 metric tonnes per annum. The existing plant is located in Silvassa and last year we clocked a turnover ofRs 800 crore.Also, very recently, we have set up another plant to the capacity of2,16,000 at Sarigam, Gujarat. This plant is for the production of polyesterchips on the continuous polymerisation process. It was set up at an outlayof Rs 170 crore, out of that Rs 70 crore was met through an equity issue andthe balance Rs 100 crore through internal accruals, partly by debt too.I am pleased to say that this is world's single largest stand-alone plantfor production of polyester chips.

Q: What can we expect as a result of this?

A: On an anualised basis, the additional turnover from this plant would bein the order of Rs 1000 crore. Even if we take the first year of operation,the plant operates at 75% capacity utilization and the revenue should be inorder of Rs 750 crore. Our earlier turnover was Rs 800 crore and this shouldadd another Rs 750 crore. So the total turnover of the company should double. On a conservative estimate basis, the total profitability should also double.

Q: In terms of cost saving on raw materials, power and fuel is also a bigcost for you, which has gone up about 5% at this point. For cost savingwhat is the road for JBF?

A: In the recent Budget announcement, the customs duties on the raw materials went down from 15% to 10%. Excise duties were reduced from 16% to8%, that was on finished goods. When we take the custom duty reduction from15-10% , and local producers price their products on import parity basis,the 5% reduction would tend to a reduction of about Rs 2.50 per kilogram inthe overall raw material costs. At the same time, excise duty has been reduced on finished goods from 16%to 8%, that 8% reduction would lead to above Rs 5 per kilogram reduction inthe raw material prices to the ultimate consumer. Therefore, the entirechain would get a price concession of about Rs 7.50 – 8. Now that can be shared in some manner, we can keep about Rs 2 and pass about Rs 4.

Q: Your project in Emirates of Ras Al Khaimah, could you give us moredetails on that?

A: This is a 324,000 tonnes per annum project and it is a chips and filmmaking plant. This will be set up in a place called Ras Al Khaimah in UAE,which is about an hour's drive from Dubai. The total investment for thisplant is USD 90 million and the equity is about USD 30 million. Out of that,we have a 60% contribution. So we have a major shareholding in this plant.The first phase of this plant would be operational somewhere in the firstquarter of the next year. As I foresee, on an annual basis it shouldgenerate a turnover of USD 325 million. We hope that atleast 15% of this would be profit generated. The dividends coming out of this would be addedto our bottomline, as this plant is a subsidiary of JBF Industries.

What are your FY07 targets for topline and bottomline?

A: We are in line to achieve our targets for topline and bottomline. Withthe commissioning of new plant and with the concessions that we have got inthe Budget, we hope that our profitability should improve further. We alsohave certain plans of expanding POY in the future.

Q: Could you give us a target for FY07 either on EPS front, topline orbottomline?

A: It will be very difficult to say, but definitely in terms of total sales and profits, they should double