Tortured capacity

There was news some time ago that Sajjan Jindal would agree to take up the Lakshmi group8217;s Southern Iron and Steel Company Siscol, on...

There was news some time ago that Sajjan Jindal would agree to take up the Lakshmi group8217;s Southern Iron and Steel Company Siscol, on condition that the SEBI should exempt him from making an open offer to its shareholders. Though the tycoon kept denying this in public, it8217;s out in the open that the tycoon has agreed to take over 52 per cent stake of the ailing company, which has huge losses and debts of Rs 850 crore to its name, as well as agreed to come out with a 20 per cent mandatory open offer to all minority shareholders, after he acquires Siscol.

This is nothing new for Jindal who has followed a policy of taking up stressed-out units and turning them around for some time now. Siscol is good bait for the tycoon because it is a 5 lakh tonne per annum producer of long steel products, a sector the tycoon would like to get stronger in. Especially considering his competitor Tata Steel has just added NatSteel, a company that has added to its collection of long steel products greatly. Jindal intends to double Siscol8217;s present capacity of 3 lakh TPA of steel, as well as introduce the manufacturing of value-added products. Thus, a production capacity of 10 mt per annum is what the tycoon will aim for in the future. We8217;ll have to wait and see if the withered Siscol unit is able to give back to Jindal, more than what he has chosen to put into it.

Salt of the earth

Kanoria Chemicals8217; tycoon R.V. Kanoira is going in for a serious expansion of his plant at Renukoot, in Uttar Pradesh. This will help set up a chlor-alkali project as well as increase the plant8217;s power generation capacity. The tycoon believes that both plants will be able to start working by the end of next year.

In the meantime KCIL, which already possesses self-sufficiency in power and salt, two raw materials that are necessary for the success of a chlor-alkali project, has a clear advantage above other competing companies. Kanoria is well aware of this and has smartly added to his luck by getting salt supplied from Rajasthan, apart from Gujarat. This along with his expansion plans will help the tycoon in the long run to get serious additions to his profit line.

Fertile ground

With tea prices looking up, G.P. Goenka8217;s Duncan Industries is also looking at the brighter side. After facing dreadful luck in the form of huge losses, which led him to separate his tea and fertiliser business, the tycoon has now found reason to smile. This is thanks to the ray of hope in the form of the recently received Corporate Debt Restructuring package from Financial Institutions, and banks like the State Bank of India, HDFC, Bank of Baroda and Punjab National Bank etc. The tycoon is using this to put life back into his tea business and help him clear his Rs 660 crore in dues. The tycoon presently has 10 tea estates in the Dooars and Terai region, and two in the Darjeeling hills. But with competitors like Tata Tea, and HLL he will have to do much more than hope, to be able to get his tea noticed among the multitudes of others. In the meantime, he is waiting and hoping to win a litigation case against the Government regarding his fertiliser plant near Kanpur. If the tycoon wins, he would get Rs 360 crore, which he can utilise in improving his tea conditions. Or as the rumour mill goes, he just might use it to launch tea boutiques all over the country.

dilipcherianhotmail.com