The Hindu Business Line : Adhunik Metaliks plans foray into forgings biz

The city-based Adhunik Metaliks Ltd, a manufacturer of value-added steel products, is planning to foray into the forgings business though an overseas acquisition.

According to Mr Manoj Kr Agarwal, Managing Director, the company would be producing both automobile and engineering forgings and is likely to have capacity of one lakh tonnes per annum.

"There are several spare forgings capacities in the US and the Europe. We would like to buy out those companies and bring the machinery back to India and set up our own facility," he told newspersons.

The company is eyeing an acquisition cost of Rs 30-70 crore for this forgings facility.

In India, its forgings facility may be set up in Kharagpur, Chennai, Pune or Jamshedpur.

The company is also open to a joint venture route for its proposed forgings business. Mr Agarwal said that the forgings business would materialise within two years.

The company is busy implementing its second phase of capacity expansion project for speciality steel. It would take its total capacity to 0.45 million tonnes per annum.

Meanwhile, the company has acquired Unistar Galvanising and Fabrication Ltd, a Kolkata-based transmission tower manufacturing company, for a consideration of Rs 4.5 crore.

Unistar, which is engaged in the production of electrical and telecom towers, would become a wholly owned subsidiary. "We would be investing around Rs 25 crore in the transmission tower business."

Two months back the Orissa Government offered iron ore mining rights to Adhunik Metaliks at a place in the Keonjhar district. The company is currently preparing the mining plan.

Mining would begin from April next year. The company would be investing Rs 10-12 crore in the project.

For the year ended March 2006, Adhunik Metaliks recorded a turnover of Rs 423 crore and profit after tax of Rs 33 crore. On Friday, the Adhunik scrip opened at Rs 28.20, clocked a high of Rs 29.75 before closing at Rs 29.20 on the BSE.