Bharat Wire Ropes is to invest Rs 500 crore in a new plant at Chalisgaon, Maharashtra, to expand its total manufacturing capacity to 76,000 tonnes.
At present, the speciality wire rope manufacturer’s capacity stands at 10,000 tonnes per annum, it said in a release.
“The Chalisgaon project will be a state-of-the art with integrated pickling, patenting galvanising, wire drawing, stranding and closing - all under one roof. The machinery will be imported from Germany, Italy and Spain,” said Promoter and Managing Director M.L. Mittal.
”Half of the production will be exported across the globe and the remaining will be sold in Indian markets,” Mittal added.
On demand, he said there were very few players in the organised segment both in the domestic and international markets.
Revenues from the existing plant at Shahpur were Rs 100 crore for FY'12. There is a huge demand and BWR is focusing on Dubai, Singapore and Nepal due to production constraints. The new plant is expected to be commissioned in 2014.
The total cost of the Chalisgaon project is pegged at Rs 490 crore. This would be funded by term loans of Rs 330 crore from banks, a fresh capital infusion of Rs 140 crore by promoters and private equity players and Rs 20 crore through internal accruals.
Of the term loan of Rs 330 crore, Rs 220 crore has already been sanctioned and the balance is under advanced stages of approval which is expected to materialise in a month.
The project work will commence in January 2013 and will be on stream in June 2014.
Established in 1986 in Mumbai as a speciality wires manufacturing company, BWR now makes strands, wire ropes and slings for use in industries, such as general engineering, fishing, elevators, cranes, material handling, onshore/offshore oil exploration, ports, shipping and mining.
BWR caters to the railways, navy, airforce and other government and semi-government organisations, besides exports.
The company’s portfolio covers diameter ranging from 6mm to 125 mm. The Chalisgaon plant is eligible for financial benefits from the State Government on power and VAT drawback.