KARUR KCP PACKAGING

Karur KCP Packagings BSE: 531363 Industry : Packaging



Karur KCP Packaging is a company engaged in manufacturing all kinds of packaging materials with the latest technology. The company manufactures the following types of packaging materials :
SPECIAL PACKAGING PAPER
When cement manufacturers’ requirements increased for paper bags, the company’s answer was to put a paper mill in Pondicherry to manufacture ESKP.
Set up with an investment in excess of 11.70 million US dollars, in 1996, the unit manufactures a special packaging paper called Extensible Sack Kraft Paper (ESKP) with an international technology called CLUPAC. The unit has surpassed the CLUPAC standards in quality.


Hi-Lights:
Present production capacity is 70 tons per day
Annual turn over is more than 15 million US dollars

PAPER BAGS
Way back in 1986, the company started manufacturing stitched paper bags and then to an innovative and more modern Pasted Paper Bags, with imported ‘Bottomer Machine’ from Japan.
The company has 6 numbers of latest Tuber Machines and 4 numbers of Bottomer Machines for producing fine quality paper bags with minimum manpower.
Hi-Lights:
Present production – 9 million bags per month.
Annual turn over of more than 30 million US dollars expected to reach a turn over of 40 million in next 3 years.



POLY PROPYLENE BAGS
This is one of the units that earned the company its high repute. Located at Mayanur, Karur District, in Tamilnadu and started in 1991, it has excelled in the production of Quality Poly Propylene bags for over a decade. It has 3 Extruders of “Kholsite” make with imported ‘T’ die, of the renowned ‘EDI, USA’ make, as a part of its modern machinery, helping it to achieve high quality levels.
Catering exclusively to the cement companies, this unit has many of the top cement manufactures for its clients.
Hi-Lights:
Present production – 5 million bags per month
Annual turn over of more than 8 million US dollars expected to reach a turn over of 10 million in next 3 years

FIBC DIVISION
The latest addition to the group is the formulation of FIBC division mainly set-up to cater the needs of USA & EUROPEAN market. At present it has capacity to convert 250 Tons of Poly Propylene per month and in next 6 months 300-400 Tons of Poly Propylene per month and in next 6 months 300-400 Tons will be added to this capacity.
The stress on total quality control is visible from the fact the manufacturing and finishing operation is totally dust free and airconditioned
Can manufacture from 500 kgs. to 2500 kgs. capacity bags

OUR FUNDAMENTAL ANALYSIS:

1. The equity is very low and with a high promoter holding, the floating stock is low.

2. The book value is almost 70 as at March 2007 which is a good sign.

3. Profit is in increasing trend and by March 08, we expect a profit of over 11 crores, thereby commanding a year-end EPS of over 11, even 12.

4. Even if the share trades at a modest 12 times future earnings, we can see a price of about 120 by April 2008.

5. The company has a long future and with ever increasing demand for cement, there will be increasing demand for bags, paper bags etc. Other peer group companies are commanding huge valuations.


INDIA CEMENTS, A LEADING CEMENT MANUFACTURER OF SOUTH, IS ALSO A SHARE HOLDER OF KARUR KCP PACKAGINGS.


CONSIDERING ALL THESE, WE GIVE A CALL TO ACCUMULATE.