Tata Metaliks to enter into JV with Japanese major
Tata Steel's wholly-owned arm Tata Metaliks Ltd on Thursday announced a Rs 150 crore joint venture with $10 billion Kubota Corporation of Japan and Metal One Corporation to manufacture pipes used in transporting water.
By PTI |
KOLKATA: Tata Steel's wholly-owned arm Tata Metaliks Ltd on Thursday announced a Rs 150 crore joint venture with $10 billion Kubota Corporation of Japan and Metal One Corporation to manufacture pipes used in transporting water.
"The project cost will be Rs 150 crore which would be funded in a 1:1 debt equity ratio. We will hold majority stake of 51 per cent, Kubota will hold 44 per cent and Metal One Corporation five per cent," Tata Metaliks chairman T Mukherjee told newsmen after the board approved the project on Thursday.
The announcement came on the heels of Tata Steel confirming talks with another Japanese firm Nippon Steel for a joint venture to make steel for automotive companies in India.
Mukherjee said the name of the JV was yet to be named, but it could be Tata Metaliks Kubota Pipes. Harsh K Jha, Managing Director of Tata Metaliks would head the board.
Tata Metaliks would supply the liquid iron directly for making ductile iron pipes. This would make Tata Metaliks more competitive than global makers, Mukherjee said. The new venture would add about Rs 350 crore to its topline, Jha said.
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The facility would be spread over 40 acre at the existing plant at Kharagpur. The 1,10,000 tonnes per annum capacity (phase-I) unit would be completed in 2008-09. Mukherjee said the company would attempt to export pipes to maximise the revenue.The Indian ductile iron pipe market used for drinking water is estimated at 0.5 million tonnes and growing at a compounded annual growth rate of 23 per cent. On current fiscal performance of the company, Jha said revenues would grow by 40 per cent over the previous year.
The company has the largest foundry producing grade pig iron in the country. In 2005-06, Tata Metaliks achieved a topline of Rs 445.87 crore. However, profits would not make a similar reflection as the turnover growth since margins were under pressure compared to last year, Jha said.
Mukherjee, speaking about a pending project for a mini steel plant of 0.5 million tonne, said the West Bengal government was acquiring land for the company, but the process was yet to be completed. "It will take some more time and we will begin putting up the steel plant after we get land," Mukherjee said.
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