The Hindu Business Line : Jessop buys machinery from Mukand foundry unit

JESSOP & Co has acquired the plant and machinery of the closed foundry division of Mukand Ltd at Kurla near Mumbai, which will further its plans to set up a bogie and coupler plant in West Bengal.

Jessop, which is back in the black, is also planning acquisition of an engineering and electrical equipment manufacturing company in the eastern region.

In a deal concluded this week, Jessop has acquired the entire range of plant and machinery of the foundry division of Mukand through a special purpose vehicle, Pallavi Manufacturers Pvt Ltd. The foundry was closed for more than three years. Mukand will, however, continue to own the land.

The plant and machinery will be used to set up a facility at Durgapur in West Bengal to improve the performance of Jessop's wagon division and optimise emerging opportunities of selling wagons to the private sector and in the export market.

Talking to Business Line, Mr Pawan Ruia, Chairman of the Ruia group, which now controls Jessop, said that the new facility would be commissioned within six months at a total cost of Rs 15 crore. Mr Ruia did not disclose the cost of acquiring the assets.

Though the new facility is capable of making a range of foundry products relevant to Jessop's line of business, initially the plant will concentrate on producing bogies and couplers, currently in short supply.

"Our wagon supply schedule to Indian Railways have been hit because of the inadequate supply of bogie and coupler from railway-approved manufacturers," he said.

While supplies to the Railways are not expected to improve unless the latter relaxes supply norms for such spares, the backward integration will help Jessop in tapping the opportunities made available through the `own-your-wagon scheme'.

Talking about his other acquisition bids, Mr Ruia said his group had already petitioned the Supreme Court and the West Bengal Government for acquisition of the closed facilities of the Mining and Allied Machinery Corporation Ltd in Durgapur as part of its backward and forward integration drive.

While the decision on the MAMC is still pending, Jessop is now actively pursuing acquisition of a medium-sized company in the eastern region to boost its structurals business and also open a new line of product in the electrical sector. "We are expecting to close the deal this fiscal," he added.

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