Aditya Birla Nuvo Ltd has said that it will re-align its capital expenditure plans with the outlook in the various segments it operates in. The company has spent Rs 347 crore this year on projects, modernisation and maintenance, and on its subsidiaries and plans to spend another Rs 230 crore during the fourth quarter of the year.
It has outlined a capital expenditure programme of about Rs 400 crore for 2009-10, but a senior company official said the actual expenditure would depend on the market conditions.
A clearer picture on the capital expenditure for next financial year would be available when the company finalised its programme for the year.
Aditya Birla Nuvo, belonging to the Aditya Birla group, is into a range of activities including manufacturing, textiles, retailing and the insurance, IT, telecom and financial services sectors through joint ventures.
Of the Rs 10,100 crore of sales for the nine months of this financial year, the services businesses – BPO, life insurance, IT services, financial services and telecom – contributed close to 64 percent and the balance came from rayon, carbon black, fertiliser, textiles, insulators and garments.
According to an investor presentation made after the third quarter results, which is available on its Web site, Aditya Birla Nuvo has said some of its businesses have been affected by the global slowdown and the company is taking steps to counter the slowdown. Re-working its capital expenditure programme is one such measure.
The company has said the working capital requirements are being monitored and cost control measures taken. It raised Rs 500 crore of long-term resources through non-convertible debentures.
On the garments business, the company has said that new apparel retail initiatives (The Collective and Peter England People stores) could not achieve targeted growth due to unprecedented market conditions. The contract exports business faced weak order flow, order cancellation resulting in foreign exchange loss and under-utilisation of capacity.
The slowdown in the automobile and tyres industries affected the company’s carbon black business. High priced stock resulted in losses due to sharp fall in feedstock prices linked to crude oil.
The company has said that orders have been placed for long delivery period equipment for the 75,000 tonnes a year expansion in the carbon black business at Patalganga.
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