Kolkata, Jul 9 (PTI) B K Birla group firm Kesoram Industries on Tuesday said it remains committed to its loss-making subsidiary, Cygnet Industries Ltd, and will seriously engage in dialogue with its Japanese technical partner, Futamura, as a strategic investor after the demerger of its cement business is completed, a company official said.
He was speaking to reporters on Tuesday on the sidelines of the Kesoram’s 105th AGM, bustling as usual with shareholders and schoolgirls from Ashok Hall Group attending the meeting, but missing Manjushree Khaitan. She died on May 16.
The AGM was chaired by Satish Narain Jajoo, who was elected chairman after the demise of the Birla scion last month.
“There is no plan to hive off Cygnet. We are currently focused on the demerger process of the cement business, which is expected by December this year. We continue to believe that Cygnet, which has innovative packaging products in its kitty, can turn around,” Kesoram Industries’ whole-time director and CEO, P. Radhakrishnan said.
Cement contributed 90 per cent of Kesoram’s revenue. Kesoram Industries has sold its cement business to UltraTech Cement for Rs 7,600 crore and has received all approvals except the NCLT nod, for which the company is awaiting.
Kesoram CFO Rohit Shah said that currently, some research and development is being carried out to suit the requirements of Futamura. Currently, Cygnet’s flagship biodegradable cellulose transparent paper is targeted for retail use, while the Japanese partner wants it tailored for industrial packaging to consider the plant as part of its global supply chain ecosystem.
Radhakrishnan said Cygnet requires a fund infusion between Rs 45-60 crore, which would help attain a scale that could take the turnover to Rs 1,000 crore over the next few years.
Cygnet is the only company in Southeast Asia that manufactures non-toxic, biodegradable cellulose transparent paper, also known as cellophane paper, used to wrap food and protect it.
Cygnet is also in the business of viscose rayon filament yarn and chemical manufacturing verticals and has around 1,500 employees.
In 2023-24, Cygnet’s revenue stood at Rs 246.40 crore, and it posted a loss of Rs 67.61 crore.
Meanwhile, Kesoram’s net loss in 2023-24 nearly doubled to Rs 384 crore compared to the Rs 194 crore loss posted in the previous year. PTI BSM NN
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