Essel Propack ‘s Global Sales cross Rs. 10 Bn for the year ended 31 Dec 2006

MUMBAI: Essel Propack today announced the un-audited consolidated global results for the year ended 31 December 2006. The Company reported a substantial increase in its global revenues for the year 2006. The sales have crossed Rs. 10 Billion mark (Rs. 10,099 Million) with a net profit close to Rs. 1 Billion (Rs. 985 Million). During the year 2006, the Company’s consolidated global sales registered a growth of 24% over the same period of 2005, while the EBIDTA and net profit grew by 19% and 9% respectively.

The international operations of the Company have contributed 72% (up from 69% in the year 2005) of the consolidated revenue, thus reflecting the trend of increasing overseas growth and consolidation.

The global performance also reflects a growth in sales and net profit of 28% and 10% respectively during Q4 of 2006 over Q4 of 2005.

Announcing the results at Mumbai, Ashok Goel, the Vice Chairman & Managing Director of Essel Propack said, “We have grown steadily in our tube business. Our efforts to leverage EP’s core competencies of plastic processing has begun to pay off with increasing contribution from Medical Devices and Speciality packaging businesses.”

During the year 2006, many steps were undertaken to sustain consistent growth and increase in revenues. One such significant step was to broad-base the business with addition of new product lines. The acquisition of medical devices and speciality packaging business in 2006 were a move in this direction.

R. Chandrasekhar, President, Essel Propack added, “As we progress, during the coming years, the Medical Devices and Speciality Packaging will increasingly contribute to the top and bottom line.”

Speaking about the Speciality Packaging materials business, Ashok Goel said, “The business is well positioned to ride on the increasing need for packaging solutions, fuelled by factors such as India becoming the world manufacturing hub for prescription drugs, the retail boom and therefore the need for convenience packaging. There are further value propositions to up the value chain in Pharma and exports which can be easily tapped into leveraging on EP's capabilities of extrusion lamination.”

The thrust was also on rapidly expanding the capabilities and footprint with plastic tubes. The existing capacity of the UK plant was expanded. A new green field plant in USA went on stream in December 2006. The expansion and the green field are based on new state-of-the-art technologies, which give better operational flexibilities and more economical costs of operation.

The year 2006 saw additions of new customers from the skin and hair care segments in US. These segments offer an increased value proposition and are complementary to the thrust in plastic tubes. This step has further improved the company’s margins. Further, in certain markets, the company has exited low margin businesses.

During the year, the organisation’s another focus area had been the turnaround of the acquired businesses in UK and the start-ups in Mexico and Russia. By the end of 2006, EP was successful in turning around the laminated tube business in UK and Mexico. The plastic tube business in UK has reached the breakeven levels by end 2006. The Russian business is still evolving and has a good potential. The efforts will continue along the turnaround plan during the coming year.

EP has been successful in opening up new segments in Pharma and sampling with Minitube Technology. This technology has found wide acceptance in Pharma and oral care. Despite continuously expanding capacities, the capacities are fully booked by the end of 2006.

To optimize the resources, EP has been continuously evaluating options to close down facilities with unviable capacities. Moving in this direction, during 2006, the Nepal plant was closed down.

In 2007, the company will continue to focus on moving the revenue platforms to higher value products, continue the turn around of units, improving the margins further and also improving the returns.

Essel Propack is promoted by Essel Group. Essel Propack, head quartered in India, manufacturers laminated tubes, plastic tubes, medical devices and speciality packaging materials. The Company provides tube packaging solutions to toothpaste, pharmaceuticals, cosmetics, toiletries, food and industrial sectors all over the world. In Medical Devices, the company manufactures cardio-vascular catheters and delivery systems.

The Speciality Packaging Materials of the company currently caters to the Food and Pharma industry. The Company has state-of-the-art manufacturing facilities in 13 countries with 24 plants across the globe. Essel Propack’s stock is listed on the Bombay Stock Exchange and the National Stock Exchange.

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