Suresh P. Iyengar
Mumbai, Nov. 2 Mukand Ltd, part of Bajaj Group, plans to reduce it Rs 1,350-crore debt by more than half in a year by selling off surplus land at its plant in Kalwa, on the outskirts of Mumbai, and utilising internal accruals.
Mr Niraj Bajaj, Chairman and Managing Director, Mukand, said the company has identified surplus 60-100 acres at its unit at Kalwa, and expects the land to fetch over Rs 700 crore.
“The fund along with enhanced internal accruals will more than halve our debt in the next one year,” he added.
With no major expansion planned in the near future, Mukand will add a better half of the profits to internal accruals, which will help the company trim the debt.
The company has completed Rs 350-crore expansion of its capacity from 300,000 tonnes to 500,000 tonnes of high-quality speciality steel during the second quarter of 2009-10. It will take another five months for the plant to stabilise and start production at its full enhanced capacity, said Mr Bajaj.
Though the full impact of increase in production capacity will be realised in 2010-11, the top-line will touch Rs 2,400 crore in the current fiscal against Rs 1,945 crore achieved last year.
Reversing the falling trend, Mukand had in October increased prices 5-7 per cent to offset the rise in raw material cost. The company expects the raw material cost to go up further as the pace of recovery of the global economy improves. The company has drawn up plans to curtail expenditure, with special focus on cost cutting at the administration and production levels.
Mukand Bekaert Wire Industries has commenced production of stainless steel wires at Nashik. The company entered into a 50:50 joint venture with Belgium-based NV Bekaert SA, world’s largest steel wire manufacturer, two years ago.
“The plant has a capacity to produce 1,200 tonnes of the high quality stainless steel wires which are in great demand in the export markets,” said Mr Bajaj.
The company’s industrial machinery division, which owns large cranes and undertakes bulk cargo movement, has an order book of Rs 580 crore.Related Stories:
Mukand in pact with Japan’s Kobe Steel
Mukand Steel: A turnaround tale