BANGALORE, June 6: HSBC Private Equity India Fund Ltd of Mauritius, part of HongKong & Shanghai Banking Corporation, has acquired 27 per cent shareholding in Kurlon Ltd.
The Mauritius-based firm has pumped in around Rs 14 crore, which includes a premium, for acquiring the equity of the mattress making company.
The Rs 110-crore Kurlon Ltd is owned by T Ramesh U Pai and family who are based in Manipal. While the company's authorised capital stands at Rs 15 crore, the issued, subscribed and paid-up capital is around Rs 7.09 crore.
According to Kurlon executive chairman KK Rao, the company's decision to dilute the promoters' stake was aimed at raising funds for its expansion plans. Kurlon also plans to make for an initial public offering shortly. "Kurlon is contemplating to set up rubberised coir manufacturing facilities in Gujarat and Haryana with a capacity of 350 tonne rubberised coir a month.It is estimated that the total investments will be Rs 24 crore," said Rao.The company will be sourcing coir andother raw materials from South India once the proposed plant at Gujarat starts production. Having a manufacturing capacity of over 700 tonne of rubberised coir a month, Kurlon currently has units in Bhubaneswar, Arsikere and Bangalore.
On the marketing front, the strategy of Kurlon is to make available all the products in the segment. The company offers bed sheets, "Kurlopillo" pillows and soft furnishings, "Kurlomat" coir creations, and "Westways" soft luggages in addition to "Kurl-on" mattresses. "We have a market share of more than 60 per cent in rubberised coir mattresses in India," claimed Rao. Sealy Kurlon Ltd, a 50:50 joint venture with Sealy of the US, is setting up a unit to produce mattresses at Dobaspet Industrial Area in Karnataka where it has acquired some land. The production is expected to begin within the next nine months.
Rao said the joint venture company is now contemplating to utilise Kurlon's manufacturing unit at Peenya Industrial Area to make mattresses initially.
"As the proposedunit at Dobaspet Industrial Area is unlikely to go on stream before December, we may have to use the Peenya facilities for an early launch. It is expected that Sealy Kurlon will be unveiling "Posturepedic" branded mattresses in September in the country.
The company has also roped in DuPont to manufacture and market fibrefill mattresses. The new entity with a 50:50 shareholding will set up production facilities at Thumkur. The official launch of the products is slated for October this year. As per the agreement between the companies, DuPont will provide the technical knowhow to manufacture the core pads with imported fibrefill using the vertical fold technology. These core pads are expected to be finished into mattresses after quilting and tape-edging by Kurlon. The finished mattresses will be marketed by the new entity through Kurlon's distribution channel.
With these investments the company expects an annual turnover of Rs 226 crore by 2001-02.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.