Usha Martin mulls China entry, lines up Rs 1,400 capex
Wire rope and speciality steel maker Usha Martin Ltd is entering China with a view to cash in on the huge infrastructure boom there. The Jhawars promoted Usha Martin, which also has interests in IT software and newspaper space, may come up with a manufacturing plant in China in the long run.
To begin with, the Kolkata-based Usha Martin will be setting up an office in China early next month. The company is eyeing the wire rope market for elevators, cranes and various mining equipment products in China. Usha Martin currently has manufacturing facilities at Ranchi, Jamshedpur, Hoshiarpur, UK, Thailand, UAE and USA.
“China is a huge market and is also the fastest-growing. At the moment, we are closely observing the market, and checking out the raw material availability,” says Rajeev Jhawar, managing director of Usha Martin. The company has posted a consolidated net profit of Rs 137.45 core during 2006-07 registering 63 per cent growth on a sales turnover of Rs 1964.71 crore.
Usha Martin's net profit from its India operation during the year increased to Rs 101.48 crore recording a growth of 56 per cent.
Usha Martin joint managing director P Bhattacharya said that the company has lined up an investment of Rs 1,400 crore which included ramping up capacity, development of coal mine, setting up of a bright bar plant and power plant and creating infrastructure in its captive mines. The company would also increase its speciality steel capacity to one million tonne, from 0.5 million tonne now, within the next three years.
He added that the company would commission a plant in Chennai in one and a half year's time to produce bright bars required for manufacturing auto components. It would have a capacity of 30,000 tonne per annum. Usha Martin board during its meeting recommended dividend of Rs 3.75 per share on equity share of Rs 5 each. The board also recommended stock split of equity shares of Rs 5 each in five shares of Rs 1 each subject to necessary approvals.
Q4 net soars 42 per cent
Usha Martin has posted a 42 per cent jump in net profit to Rs 29.02 crore for the three months ended March 31, as compared to Rs 20.38 crore in the same period a year ago. Total income of the company rose 10 per cent to Rs 403.74 crore in the January-March period as against Rs 366.74 crore in the corresponding period last fiscal.