Foraying into energy sector, diversified business group JK Organisation will set up a 1,360-MW power plant near Jhansi in Madhya Pradesh, on which it will make an initial investment of Rs 1,300 crore within two years.
A top official of the group today said JK Organisation will set up a new entity to run the power business, which it hopes to be one of the major contributors to its revenue.
“Yes, as a group we are venturing into the power sector. To start with, we will be confined to thermal power plants. We are putting up a 1,360-MW power plant near Jhansi in Madhya Pradesh,” the JK Tyre & Industries Vice-Chairman and Managing Director, Mr Raghupati Singhania, told reporters here.
First phase
He said in the first phase, the group will start a 660-MW plant within the next two year.
“In the first phase, the total investment will be Rs 1,300 crore,” he said, but did not elaborate on the overall investment for the entire project.
Mr Singhania said this project is basically a commercial project and the business will be controlled under a separate entity. “We will form a special SPV in the coming days.”
When asked about revenue expectations from this venture, he said: “Power sector is very huge and we expect this to become a major revenue generating business. However, I cannot quantify it right now.”
On the financing of the project, he said the group will raise funds, but details will be decided later.
JK Organisation has interests in a range of businesses, including tyres, paper, cement, sugar and seeds.
Chennai tyre plant
Updating on the tyre sector, Mr Singhania said JK Tyre & Industries is looking to advance the opening of its upcoming plant in Chennai in order to meet growing demand.
“As the demand is growing, we are trying to expedite for an early operationalisation of the Chennai project. The plant will be ready by the end of this year from an earlier schedule of around May-June 2012,” he said.
The Chennai plant will have an initial capacity of 25 lakh passenger car tyres and four lakh truck and bus radial tyres annually. The firm is investing Rs 1,000 crore on the plant.
He said in due course of time when demand grows, the capacity of the plant could be increased by three-four times.
The company today showcased a range of footwear manufactured from its used tyres in association with the Footwear Design & Development Institute.
On asked whether the company is looking to commercialise the product, Mr Singhania said: “This can be done. We will be evaluating all options and we will be able to tell you only after that”.