Balkrishna Steel Forge, a manufacturer of pipes used for transporting petroleum products, has acquired Rajkot-based forging company Kadvani Forge Ltd (KLF).
The company is an indirect supplier of gearbox parts used in Tata Motor’s Nano car.
Vitthalbhai Dhaduk, KFL’s new chairman, confirmed that the company had been taken over. He, however, refused to divulge further stating that the takeover process was still on.
According to sources close to the development, the deal size was about Rs 34 crore.
“It is good deal for us as KFL is a big name in forging industry. We will not take up any new projects for KFL as the slowdown has affected the overall industry. However, we will not disturb its ongoing projects at the same time,” he added.
Balkrishna Steel is yet to decide if it would merge KFL with itself. “Our prime focus is to make ourself safe from recession. KFL has been affected by it and we will have to chalk out a recovery path for the company,” said Dhaduk.
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KLF technical director Jayant Jamuar said the company had faced difficulties in last two years due to the slowdown as its international clients were been hit by the recession. “As compared with this, the domestic market is pretty safe. We are upgrading our software, which will further help the company in its research work,” he said.
The company posted a turnover of about Rs 70 crore in 2008-09.
Kadvani Forge started its operations in 1997 with a manufacturing capacity of 50 tonnes per month. It currently has a capacity to manufacture 3000 tonnes of forgings per month.