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Monday, Jan 31, 2005

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Usha Martin likely to buy wire rope manufacturing co

Our Bureau

Kolkata , Jan. 30

USHA Martin Ltd is likely to acquire a wire and wire rope manufacturing company within the next 18 months to augment the capacity of its wire and wire rope products division to 2,10,000-2,20,000 tonnes per annum from 140,000 tpa at present.

Addressing a news conference here, Mr Rajeev Jhawar, Managing Director of Usha Martin Ltd, said the company had entered into an agreement with JCT Ltd for acquiring the latter's steel wire and wire ropes division located at Hoshiarpur, Punjab, for a consideration of Rs 21 crore. Capital expenditure to take the production of steel wires and wire rope products to 1,80,000-1,90,000 tpa was already in place. Augmenting production further to 2,10,000-2,20,000 tpa was being considered through the acquisition route, Mr Jhawar said, adding that this was likely to be made in the US or Europe, the major consumption points for steel wires and wire ropes.

"When we reach steel wire and wire rope production of 220,00 tpa, wire ropes will account for 90,000 tpa. That will make us the largest wire rope manufacturing company in the world, ahead of current world leader Kiswire of South Korea," Mr Jhawar said. Currently, Usha Martin was addressing HR issues with a view to building managerial capabilities to effectively manage multi-locational units.

Mr Jhawar said the company's optical fibre and jelly-filled cables plant at Silvassa was operating at 100 per cent capacity utilisation and was expected to generate revenue of around Rs 140 crore this year. With the demand for specialised steel from automobile companies and auto-ancillaries, Usha Martin was augmenting capacity at its Jamshedpur plant in a phased manner.

During the third quarter ended December 31, 2004, Usha Martin registered a total income of Rs 303.68 crore, up from Rs 205.64 crore recorded in the corresponding period of 2003. The net profit was Rs 9.02 crore, up from Rs 2.93 crore in October-December 2003.

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