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Premco Global


Premco Global produces elastic tape for the garment industry.

The company is a leading manufacturer of elastic tape.  It expanded capacities in the last financial year along with a new unit at Vapi.  Management expects production increases to match a growing sales order book.

The company has reported steady revenues and operating profits in the last five years – reporting about 3cr of operating profits on revenues of about 40cr in the last twelve months.  It employed a moderate debt load to finance its operations (as at 31st March, 2011).

The business is dependent on the garment industry fortunes.  It is exposed to increases in crude oil and rubber, which are major raw materials in its operation.  It is also adversely impacted by a strengthening INR, which affects its export competitiveness.

The nature of the business is such that it is vulnerable to high competition including from local manufacturers; this despite the company’s track record, reputation and customer goodwill.  This is indicated by low returns on invested capital, which may be worsened by plans to expand capacities in the future.

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