Group enters pact with West Bengal for three projects
On expansion mode
The idea behind the acquisition is to “find a toehold” in Jharkhand
To set up steel, cement, power plants in West Bengal at an investment of Rs 16,000 crore.
The group is also set to acquire the steel division of HEG Ltd of Chhattisgarh
Kolkata, Nov. 1 Jai Balaji Industries, flagship of the Rs 2,000-crore Jai Balaji Group, has acquired sponge iron manufacturer Nilachal Iron & Power Ltd (NIPL) for a “cash down deal” of Rs 72 crore.
Located at Saraikela in Jharkhand, NIPL’s plant has a capacity to manufacture 1.25 lakh tonnes of sponge iron per annum (tpa). Following the acquisition, NIPL has become a 100 per cent subsidiary of Jai Balaji Industries.
Addressing newspersons here today, Mr Aditya Jajodia, Chairman & Managing Director of the Jai Balaji Group, said the idea behind the acquisition was to “find a toehold” in Jharkhand, before implementing brownfield expansion projects there. Plans would soon be firmed up to augment the capacity of the plant to 0.5-1 million tpa and add a captive power plant of 75-150 MW capacity.
A firm decision in this regard would be taken by the company’s board at a meeting slated to be held later this month.
Mr Jajodia said that within the next 6-7 years, the Jai Balaji Group would have a steel production capacity of 8 million tpa.
This would be achieved through greenfield and brownfield expansions.
A memorandum of agreement has been entered into with the West Bengal Government for setting up a five million tpa integrated steel plant, a three million tpa cement plant and a 1215-MW capacity captive power plant in Purulia district of West Bengal at an investment of Rs 16,000 crore.
The group is also set to acquire the steel division of HEG Ltd of Chhattisgarh consequent upon receipt of necessary clearances in this regard, he said.
During the quarter ended September 30, 2007, Jai Balaji Industries recorded an income of Rs 274.97 crore, up from Rs 131.38 crore recorded during the corresponding period of 2006.
The net profit during the period under review stood at Rs 27.28 crore against Rs 6.19 crore in July-September 2006.