Treet Corporation announces multi-billion rupees expansion projects

Treet Corporation (TREET) in an analyst briefing held yesterday at a local hotel announced multiple expansion projects in avenues like batteries, alloy-rims, pharma sector amongst others.

Briefing began with the announcement of investment worth Rs. 7.0 billion in Lead Acid Batteries (LAB) Project. The company plans to develop two projects under the Lead Acid Battery category which includes Sealed Batteries (Non-maintenance for vehicles) and Deep Cycle Batteries (for solar Panels and UPS). Furthermore, the company announced that a distribution channel for Lead Acid Batteries is already in place along with the Product Mix.

The company informed those present at the briefing that the current production levels of the LAB are at 42,000 units per month however the company seeks to expand the production to 50,000 by June 2018 and further to 70 – 80,000 by December, 2018. The company, however, has set a production target for LAB at 700,000 units per annum.

The Lead Acid Battery project began commercial production on 30 November, 2017 last year, meanwhile, the batteries hit the stores by February, 2018.

In an industry first, the company has also announced of it plans to launch an app for home delivery of batteries. The company is betting on the highly energy intensive growing middle class to help increase sales by 14-15 percent in the short term.

Furthermore, the company is also looking to tap other regional markets with its battery projects which includes Afghanistan, Iran and Central Asian countries. The company seeks to make the move in the regional markets on the back of lower delivery cost and time versus rivaling Korean brands.

In addition to that, the company also informed of its plans to venture into the Alloy Rims plant with a total investment of Rs. 3.5 billion. The alloy-rim plant will have an initial capacity of 50,000 units, however, the company estimates that after an expansion project, the plant capacity will increase to 1 million units per year. Company estimates the payback for the project to be one year.

Furthermore, the company while releasing 2nd Quarter results for the period ending December, 2016 had announced that Board of Directors at the company approved an extension/diversification plan of its subsidiary Renacon Pharma (Private) Limited. However, no development was reported post the announcement by the company on the Exchange.

The Management during the briefing held yesterday delved into some of the details on Renacon Pharma expansion. Treet Corp has approved to make an investment worth Rs. 1.25 billion by share issue of 50 million shares in the primary market at Rs. 12.5 per share. Renacon Pharma is looking to produce Hemodialsis Concentrate – with capacity expanding to 600,000 units – and blood tubing line.

Renacon Pharma’s current capacity for producing Hemodialsis Concentrate is at 150,000 units. Treet Corp management expects the payback period for the project to be at a duration of one year.

In other projects, Treet Corp Management has also approved an investment worth Rs. 1.5 billion to setup an education project with undergraduate and post-graduate programs to be offered in arts, culture and architecture. The company seeks to finance the investment by Global Arts Limited – a subsidiary of Treet Corp Ltd. – by supplying assets on lease.

Posted on: 2018-05-15T11:14:00+05:00