INDIA BUSINESS WORLD - May 2005
THE MONTH THAT WAS

USHA Martin Limited, a leading producer of wires and wire ropes, has entered into a joint venture with Joh Pengg AG, a large producer of automotive wires, to set up a greenfield manufacturing facility in the country.

The Austria-based Joh Pengg AG, which is a large producer and exporter of oil, tempered, round and shaped wire for automotive applications, will have a 60% stake in the joint venture. The Usha Martin group will pick up the remaining 40% equity.

The new venture has been formed to cater to the growing demand for automotive applications, both in India and the global market, Usha Martin Limited informed the Bombay Stock Exchange.

The proposed joint venture is planning to set up a production facility with an annual capacity of 3,000 tonnes. The capacity is proposed to be raised in stages to 10,000 tonnes per annum over the next few years. However, it was not mentioned where the new manufacturing unit would be located. The Usha Martin group has manufacturing facilities in Jamshedpur and Ranchi. The new venture follows Usha Martin's recent acquisition of JCT's wire and wire ropes division for a sum of around Rs 15 crore. The facility is expected to add nearly 3,000 tonnes to its existing capacity.

The group has already announced its intention to reduce the gap between itself and the world's largest wire rope manufacturer-Kisware of Korea. Currently, the Korean company produces 80,000 tonnes per annum while Usha Martin's capacity is at 70,000 tonnes. It is, thus, on the lookout for acquisitions in the US. In particular, it is eyeing possible targets to cater to crane ropes, elevator ropes and those used in the mining and construction sector.