Mukand Ltd to set up stainless steel wire JV with Belgium''s Bekaert

Mumbai: Mukand Ltd will set up 50:50 joint venture with Belgium''s Bekaert SA to make stainless steel wires, the company said in a statement.

The two companies will jointly invest Rs100 crore through a combination of debt and equity in the joint venture company, to be called Mukand Bekaert Wire Industries Ltd. The debt component will be Rs50 crore and the two companies will invest Rs 25 crore each as the equity component.

The new company''s plant at Leonad in Satara, Maharashtra will have an annual production capacity of 12,000 tonnes, around 85 per cent of which will be exported. The plant is scheduled to become operational by 2009.

The new plant will make several grades of steel wires, which can be used in welding, weaving and springs. Mukand already manufactures about 400 grades of long steel products in the form of rods, bars and bright bars, besides steel alloy wires.

Mulkand expects a turnover of around Rs60 crore from the new venture.

Bekaert''s, which has been in India for over a decade, makes steel cords for radial tyres and carding products for the textile industry at its plant in Pune, and expects the venture with Mukand to add 10 per cent to its €14-million revenues from India and double its steel wire manufacturing capacity.

"The size of the stainless steel wires market in India stood between 25,000 and 30,000 tonnes per annum and was growing at the rate of 10 per cent to 12 per cent per annum. Even the world market is upbeat and was growing between 6 per cent and 10 per cent annually," he said.

The Rs100-crore investment will be through a mix of debt and equity, with a 50 per cent participation of debt, and Rs25 crore as equity capital from each company.