The Hindu Business Line : Usha Martin to scale up production

USHA Martin Ltd (UML), the world's No 2 wire rope manufacturer, has transformed its Dubai unit into a joint venture with Gustav Wolf of Germany, one of the leading names in the industry.

The 60:40 venture - the majority control is with Usha Martin - is now set to scale up its production from around 450 tonnes per month to 700 tpm. A significant part of the production will be used by the overseas partner.

The transformation from a self-financed unit to a joint venture follows the realisation that a tie-up will enable it to increase market share, said Mr Rajiv Jhawar, MD of UML.

The unit currently manufacturers an assortment of products - crane rope, elevator rope and ropes used in the oil exploration industry. The management of the unit, even in its new avatar, remains with UML.

According to Dr P. Bhattacharya, joint MD, the company is looking at expanding its network, courtesy acquisitions and improving its distribution ties. Exports, too, are a thrust area.

During the second quarter of the current fiscal, UML has reported a PBT of Rs 14.25 crore (up from Rs 6.44 crore) and a PAT of Rs 8.63 crore (Rs 4.4 crore). Net sales stood at Rs 312 crore compared to Rs 207 crore for the corresponding period of the previous year.

The company, on another front, has pursued a debt-recast strategy by restructuring high-cost debt. A pre-payment premium of Rs 4 crore has been paid to restructure debts of Rs 140 crore; this has been charged off in its Q2 results. Another tranche of Rs 150 crore is expected to be handled similarly in future.

Strengthens ties with Otis

USHA Martin has further secured its association with Otis, the leading elevator manufacturer.

The latter has now started sourcing UML's products for its own use in a big way, it is pointed out.

The company hopes to cement its ties with Otis by catering to the global major's requirements. "We plan to fine-tune our distribution and service network in overseas markets, including those in USA, Europe and Africa", he said.

UML is now considering new distribution ventures in Australia and Saudi Arabia.