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NEW DELHI: Moser Baer India Ltd, the world's third-largest producer of recordable compact discs, plans to lift prices by up to 10 percent after a sharp rise in global demand, executive director Ratul Puri said on Wednesday.
Moser has an 11 percent share of the global optical storage media industry and competes with Taiwanese firms CMC Magnetics Corp, the top-ranked player, and Ritek Inc, the second-largest, in the $2 billion sector.
The New Delhi-based firm has an annual installed capacity of more than a billion CDRs.
Soon after Puri's comments, Moser's stock rose as much as 5.3 percent to 413.90 rupees on the Bombay Stock Exchange. It later retraced to quote at 402.75 rupees, still up 2.5 percent in comparison with a 0.3 percent fall in the main index.
"We're already negotiating with buyers for a price hike somewhere in the region of five to 10 percent," Puri told Reuters in an interview. "The hike should be in place by December and will start impacting our profit and loss account by first quarter of fiscal 2004/05."
The proposed rise would be the second so far in the fiscal year which started in April.
"Today, we can't meet demand and we've booked (orders to) 140 percent of our capacity. It's outstripping supply by a very large margin," Puri said.
Moser sells a recordable compact discs (CDR) in more than three dozen countries for an average 22 cents each and about 85 percent of its annual sales come from exports.
Puri also said Moser's $120 million expansion at its plant on the outskirts of Delhi, which will increase CDR capacity by about 45 percent, was likely to be completed ahead of schedule.
"The capacity expansion was expected to be completed by the end of fiscal 2003/04 but it will come on stream earlier," he said, adding the company's new optical media plant in Germany should be fully operational by mid-June next year.
"The German plant is to de-risk our manufacturing units in India and also since Europe is a significant portion of our overall revenue, a presence there is necessary," Puri said.
About half of Moser's exports are to the European Union and 25 percent each to the United States and the rest of the world.
Puri said the 20-year-old firm would spend about $15 million in stages on the German project.
Moser also makes the high margin digital versatile discs (DVDs) for the fast-growing home entertainment industry. DVDs have a higher storage capacity than a CDR and cost more.
Puri said Moser's DVD capacity was 100 million a year and the company also planned to increase capacity soon.
Moser, which recently announced a one-for-one bonus issue, will report its second-quarter performance on Friday.
About a fifth of Moser's 484 million-rupee equity capital is held by Puri's family, 24 percent by venture capital firm Warburg Pincus, 18 by International Finance Corporation and 12 percent each by Electra Partners and foreign and domestic funds.
Reuters