Ramsarup Lohh Udyog, which is being merged with Ramsarup Industries, is setting up an integrated steel plant in Kharagpur.
Ramsarup Industries' Durgapur plant, with a capacity of 55,000 tonnes, has already started production of low-relaxation, pre-stressed concrete (LRPC). Over the next two years, the Durgapur plant will have a capacity of 4 lakh tonnes.
The company is also expected to add approximately 36,000 tonnes of stranded LRPC wire every year for the next three years, along with other value-added products such as steel fibre, staple wire, hose wire, among others.
Ashish Jhunjhunwala, chairman and managing director, Ramsarup Industries, said, "In order to achieve complete synergy, we are aggressively pursuing our goal to be among the top ten wires and wire product manufacturers in the world in the next three years, with our own captive raw material and strong presence in the infrastructure space."
The company has two iron ore mines in Orissa, having combined reserves of around 47 million tonnes. Jhunjhunwala said mining would commence from October. As of now, Ramsarup is sourcing iron ore from the market.
Ramsarup has taken over Balasore Minerals Co and the iron ore mines, limestone and dolomite mines are a part of it. This will ensure long-term availability of raw material to Ramsarup Lohh Udyog.
Jhunjhunwala said the funds for the investment would come from internal accruals, debt and private equity.
After the merger of Ramsarup Lohh Udyog, the promoters' stake in the merged entity will be 83 per cent, which will have to be brought down to 75 per cent in six months. Jhunjhunwala said the stake dilution could be done by issuing fresh shares.
Ramsarup Industries has got a formal approval from shareholders at a high court-convened meeting to merge Ramsarup Lohh Udyog with it. The exchange ratio has been fixed at two equity shares of Ramsarup Industries for every five equity shares of Ramsarup Lohh Udyog.
The merger will be effective from April 1, 2007.
