Business Line reported that Bharat Wire Ropes is to invest INR 500 crore in a new plant at Chalisgaon, Maharashtra, to expand its total manufacturing capacity to 76,000 tonnes.
Bharat Wire Ropes said that currently, the specialty wire rope manufacturer's capacity stands at 10,000 tonnes per annum.
Mr ML Mittal promoter and MD of BWR said that "The Chalisgaon project will be a state of the art with integrated pickling, patenting galvanizing, wire drawing, stranding and closing all under one roof. The machinery will be imported from Germany, Italy and Spain."
Mr Mittal said that "Half of the production will be exported across the globe and the remaining will be sold in Indian markets."
On demand, he said that there were very few players in the organized segment both in the domestic and international markets.
Revenues from the existing plant at Shahpur were INR 100 crore for FY'12. There is a huge demand and BWR is focusing on Dubai, Singapore and Nepal due to production constraints. The new plant is expected to be commissioned in 2014.
The total cost of the Chalisgaon project is pegged at INR 490 crore. This would be funded by term loans of INR 330 crore from banks, a fresh capital infusion of INR 140 crore by promoters and private equity players and INR 20 crore through internal accruals.
Of the term loan of INR 330 crore, INR 220 crore has already been sanctioned and the balance is under advanced stages of approval which is expected to materialize in a month.
Meanwhile, the project work will commence in January 2013 and will be on stream in June 2014.