Regency Ceramics enters into leasing agreement with Segno Ceramics, ET RealEstate
NEW DELHI: Regency Ceramics has entered into a manufacturing arrangement that includes, but not limited to, leasing of facilities of Segno Ceramics located in Bapatla, Andhra Pradesh, the company informed in a BSE filing.
Regency Ceramics will pay monthly lease rentals and has two years time to decide on acquisition of the company.
Satyendra Prasad Narala, the managing director of the company said, “Segno Ceramics was taken over by new promoters through NCLT over a year ago. Unfortunately they had to stop production in the facility. We saw this as an opportunity to expand our portfolio and have structured it in such a way that ensures a marginal impact on cash flows.”
Narala says that they are a zero debt company and further expansion of Segno Ceramics will be funded through a mixture of debt, promoter funding and internal accruals.
Spread over 50 acres, the Segno plant has a production capacity of 3.6 million sq meters (MSM) per year. The facility will enable it to manufacture products including glazed vitrified tiles and polished vitrified tiles.
The company said it has complete control of the manufacturing plant effective from August 22, 2024. “We aim to achieve a revenue target of Rs 100 crore in the next calendar year from the Segno plant,” said Narala.
The company itself has remained dormant for the last 10 years. “About 8-10 months ago, we started refurbishing our plant in Yanam, Pondicherry. We expect the manufacturing to start in 3-4 months and to reach a capacity of 2.1 million sq meters,” said Narala.
Eventually, the company wants to take the Yanam plant’s capacity to 8.2 million sq meters. As of now, it is catering to its customers through manufactures in Morbi.
