Usha Martin earmarks higher investment to increase capacity

Kolkata, Jul 31 (UNI) Usha Martin Ltd today said it would invest Rs 1,200 crore over the next four years to increase its speciality steel capacity to one million tonne per annum from the present level of 3.6 lakh tonne and value added products to 400,000 tonne annually.

"This is as part of our target to be the largest speciality steel (wire and rope) producing company in the world by 2007-08," Usha Martin chairman B K Jhawar said at the company's AGM here today. It currently stands second in the field.

"The project will be completed in two phases. In the first phase, speciality steel capacity will be expanded to 0.5 million tonne over the next two years," company's joint managing director P Bhattacharya said. The company has earmarked a capex of Rs 462 crore for the first phase, he added.

The capex for the project would be funded through a combination of debt, equity and internal accruals, Bhattacharya said.

Usha Martin has already raised about Rs 200 crore through GDR and promoters warrants. "About Rs 500 crore would be funded through internal accruals and the rest could be funded as loans," he pointed out.

Usha Martin would set up one iron making unit, one speciality steel making unit, two rolling mills besides setting up its own power generation unit at Jamshedpur, Bhattacharya said.

Earlier, Bhattacharya said Usha Martin was planning buy one South East Asian wire&rope company at about Rs 50-60 crore and Rotterdam-based distribution firm at Rs 15-16 crore. The South East Asian plant would be have a capacity of producing 40,000 tonne wire rope annually.

He said the company's Houston plant in USA, which would be completed in three phases and would produce 24,000 tonne wire rope annually, is expected to be operational by December 2006.

Usha Martin posted a 53.7 per cent increase in Q1 net profit to Rs 20.33 crore from Rs 13.23 crore registered in the first quarter in 2005-06. The consolidated net profit also increased to Rs 27.31 crore during the quarter under review with an EPS of Rs 24.68 on annualised basis.

UNI TJP JYN RN1939