Usha Martin set to buy JCT rope unit

Usha Martin is set to acquire JCT's steel wire and wire rope division for Rs 21 crore by the end of March.

Rajeev Jhawar, managing director, Usha Martin, said that the due diligence process was o, and is likely to be completed by March. Usha Martin has already signed an MoU with JCT Ltd for the acquisition.

However, Usha Martin is only acquiring the assets of the company and there would be no transfer of liabilities. The JCT acquisition would add 30,000-36,000 tonne of steel wires and wire rope capacity to the company. The main objective of the JCT acquisition is to increase the share of value-added steel products.

Further, acquisitions over the next 18 months are likely. Jhawar said, Usha Martin's current tonnage of 140,000 tonne would be increased to 210,000 tonne during the period through organic and inorganic growth.

 Jhawar said, the vision of the company was to achieve a tonnage of 210,000 tonne in next 18 months and become the largest rope manufacturer in the world.

Jhawar also said that the US was a large market consuming around 30 per cent of the rope produced all over the world.

Usha Martin has manufacturing facilities in Ranchi, Jamsehdpur, UK, Thailand and UAE. It has also created a distribution, service and marketing network spread across the US, UK, Europe, Australia, Africa, Singapore and the Middle and Far East.

The company has plans to augment its Jamshedpur facility and take the auto grade steel capacity from 280,000 tonne to 320,000 tonne and then to 400,000 tonne. Jhawar said, the investment plans were yet to be chalked out. This would reflect into revenues to the tune of Rs 120 crore.