NSE Symbol: SINTEX | BSE Code: 502742
Sintex Industries Ltd is one of the chief providers of plastics and other textile-related products in the country. The company is classified into two business sections namely, plastics and textiles. In the textile segment, the company produces yarn-dyed structured fabrics, corduroy and items related to home textiles. In the plastic segment, the company manufactures storage solutions for water, fuel and oil; prefabricated and monolithic structures, custom molded products for industries, custom molded products for consumers and products for interiors. Sintex Industries has eight manufacturing facilities located at Bangalore, Nagpur, Baddi, Kalol, Kolkata, Daman, Bhachau and Salem in India. The company headquarters are located in Kalol in Gujarat with thirteen branch offices across India. Sintex also has a strong presence in the European, African, American and other Asian markets. This includes countries like the USA, France and Germany.
History and Trends
Sintex Industries Ltd was consolidated in 1931 as Bharat Vijay Mills Ltd. They had established a composite textile mill in Gujarat with the objective of manufacturing textile products. However, in 1975, the company established the plastic division and it was named as Sinter Plast Containers Division. The products that are manufactured in Plastics division are large size containers of capacity ranging from 60-1000 liters and containers with a capacity of 5000 liters for the chemical industry.
In 1980, the company established the Chemicals Division for the production of organic intermediates such as nitrochlorobenzenes, chlorobenzenes, nitrotoluenes, phenylene, diamines, anisidines, nitroanilines and chloroanilines. Later they procured the land, buildings, machinery and plant and the company started using the GOPI trademark of The New Commercial Mills Co Ltd. BVM Polyester and Chemicals Ltd also became a subsidiary of the company in the same year.
In 1990, Sintex industries began manufacturing of SMC molded products, pultruded products, resin-transfer molded products and injection molded products. In 1993, the company executed the fifth phase of the expansion-cum-modernization scheme. They installed airjet looms, rapier looms and other balancing equipment.
In 1994, they established a joint venture company for retailing fabric and plastics products in Dubai with the name Suitex Middle East LLC in Dubai. In 1995, the company's name was changed from The Bharat Vijay Mills Ltd to Sintex Industries Ltd.
In 1996 the company started producing high-quality cotton shirtings and corduroy fabrics. Also, the plastics division of the company expanded and they developed insulated False Ceilings SMC products for the electrical sector and they started producing various specialty molded articles such as Grain Storage bins, Garbage bins, etc.
In 1997, the plastic division introduced a brand-new tank under the brand name Reno to satisfy the price-conscious consumer range. Also, they forayed into the pharmaceutical sector in the same year.
During the financial year 1999-2000, they commissioned two captive power plants with relatively high capacities. Also, they fitted plastic thermoforming in these facilities.
The textile division increased the total weaving capacity from 35,000 meters to 60,000 meters per day in 2000-01. The plastic segment entered in the new line of business of a range of pre-fabricated structure using the innovative technologies. They also created an innovative product known as the FRP LADDERS during the year. They launched Thermoforming to make genuine and durable Sintex twin sheet pallets.
During 2002-03, the company began their two new manufacturing units located at Baddi and Nagpur. In 2003-04, the plastic division of the company joined a technical collaboration with the company that produced underground FRP tanks that are meant for fuel, water and wastewater. Moreover, the textile division entered into a technical and marketing tie-up with Canclini Tessile SpA, which is an Italian Company.
In March 2005, the company developed projects to manufacture underground fuel tanks and initiated their commercial production in June 2005. The company devised an entirely new housing solution - Monolith Construction - for addressing the low-cost needs. Also, they entered the waste management solutions which is an unorganized business in the country. During the year, the company extended the textile division capacity from the 18 million meters per annum to 24 million meters per annum.
In 2005-2006, the company made a tie-up with General Electric, USA and New Holland Tractors for the production of agricultural equipment and auto ancillary products. The Bhachau unit commenced their operations in December 2005, improving the capacity of the facility to 76,106 MTPA. The textile division of the company commissioned their recently installed jacquard looms. The company expanded their textile segment to produce a unique coating fabric for sportswear, travel, military purposes and other industrial products.
In 2006-07 the company tried to increase the effective exhaust waste heat recovery with the state-of-the-art technology to increase the overall productivity of the plant in Kalol.
The company helped in the construction of over 1500 low-income group houses for the Ahmedabad Urban Development Authority. In the same year, they launched new products like underground water tanks and horizontal tanks
The company acquired a controlling interest of Zeppelin Mobile Systems India in May 2006 by purchasing a 74% stake with the company.
The company launched their Spring Summer Dobby and Jacquard Collection across Europe which comprised of 3000 designs under the women and menswear category
In 2007-08 the company achieved a Super Brand status and it became a visible brand equity and stakeholder. The company entered the domestic and international markets by servicing the reputed brands like ITC Wills, Ann Taylor, Marks and Spencer, etc.
The company eventually ventured into the home furnishing segment as well and received an order for furnishing the interior of Volvo buses in France.
The company signed a MoU with the government-controlled Gujarat Urban Development Company for building quarters for the economically weaker section in Ahmedabad, Rajkot, Surat and Baroda. Their SMC meter boxes were trusted by reputed power-utility companies like Rajasthan Vidyut Vitaran Nigam Ltd, Maharashtra State Electricity Dist Co Ltd, BHEL, Northern Power Dist Co of AP Ltd, etc.
The company also introduced water tanks that are made of Fiber Reinforced Plastic (FRP), that is widely trusted for excellent and hygienic water and petroleum product storage.
In 2007, the company consolidated a wholly owned subsidiary company in the Netherlands, namely Sintex Holdings B V, to serve as a holding company for the companies that were located in Europe and US. Also, they consolidated Sintex Holding USA, Inc in Delaware, as a wholly owned subsidiary of Sintex Holdings B V. In June 2007, the company procured 81% stake in Wausaukee Composites Inc which is based in the US for 20.5 million USD. In July 2007, the company consolidated Bright AutoPlast Private Ltd as a wholly-owned subsidiary of the Sintex Holdings B V in India, to procure the automotive business of Bright Brothers Ltd.
In September 2007, the company consolidated the Sintex France SAS, a wholly owned subsidiary of Sintex Holdings B V to procure Nief Plastic S A. In October 2007; they acquired complete stakes of Nief Plastic Groupe for 34.77 million USD. In December 2007, Bright AutoPlast Pvt Ltd, which is a step-down subsidiary of the company acquired Bright Brothers Ltd for 148.9 crores. Additionally, Wausaukee Composites procured a 100% stake in Nero Plastic Inc for 4.7 million USD.
In July 2008, the company acquired the network company, Digvijay Communication and Networks Pvt Ltd through their subsidiary, Zeppelin Mobile Systems India Ltd, which they acquired many years back, in the form of a slump sale settlement amounting to a meager 54 crores. In August 2008, the company's wholly owned subsidiary, Sintex Holdings B V, acquired a staggering 90% stake in the Geiger Technik GmbH.
Delhi government supported the Sintex Monolithic Concrete Construction technology for the urban renewal programme that was introduced in 2008.
In 2017, the great demerger between Sintex Industries and Sintex Plastics occured. After the demerger, the shareholders of Sintex industries were issued the shares of both the companies in the ratio 1:1
The Sintex industries Demerger completed in May 2017. The Sintex Industries continued to hold the textile business and it was separated from the Sintex Plastics after the demerger. Sintex Plastics is less capital-intensive in nature and it has been making good profits, since the demerger has occurred. It has an established leadership in the business with a product basket that is made up of industrial products. This explain why the investors preferred to invest in Sintex plastics instead of the textile business, which was battling debt during and after the demerger.
Recently, the grip of Sintex Industries in the market has been loose. Hence, holding the stocks for a longer term makes sense. However, if you wish to buy stocks of Sintex Industries in the short term,then you may not get good returns. There are many companies in the market that have shown signs of revival in the long term. So, the answer to the question whether you should buy shares of Sintex Industries or not depends on whether you wish to buy the shares for short term or a long term.