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Everest Kanto eyes city gas distribution

This article was posted on Jan 24, 2009 and is filed under Stock News

Mumbai: Mumbai-based Everest Kanto Cylinder Ltd (EKC), the industrial and compressed natural gas (CNG) cylinders maker, will be entering city gas distribution in Kolkata. It is in the final stages of negotiations for a majority stake in Kolkata-based Calcutta Compressor and Liquefaction Ltd (CC&L).

“We will enter the city gas distribution business in Kolkata by the end of this quarter and expect revenues from the first quarter of next fiscal,” said a senior Everest Kanto official on Friday during an analyst call. He said the deal with CC&L, which could attract an initial investment of Rs 6.2 crore, will be finalised soon.

This is Everest Kanto’s first foray into the city gas distribution business.
CC&L supplies CNG for city gas distribution and industrial purposes in Kolkata and provides Everest Kanto an opportunity for forward integration. Even as it gets into new businesses, Everest Kanto has decided to put the second phase of its expansion in China on hold. “There is currently a global downturn and we will look at consolidating our position in the cylinders business,” the official said.

Everest Kanto started production at its China facility in May 2008. In the first phase, capacity was set up to produce 2,00,000 CNG cylinders and 15,000 jumbo cylinders per annum.

For the quarter ended December, its consolidated net sales were up 99% at Rs 250 crore and consolidated net profit after tax was up 30% at Rs 38 crore.

source: DNAIndia

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