Mukand is expanding it''s capacity by 80 per cent this year and guess what, the company has already made arrangements for selling the products and not just that. In this process, Mukand has forayed into the stainless steel wires business, the highest end product in it''s value chain. For this Mukand has formed a joint venture with Belgium-based Bekaert, the world leaders in wires business that is seeing a 6-10 per cent demand growth in stainless steel wires world wide.
In a 50-50 JV between Bekaert and Mukand, a 12,000 tonne stainless steel wire plant will be set up in Satara district in Maharashtra at an investment of Rs 100 crore.The synergies are right in place as Mukand with a fully integrated plant will be one of the lowest cost producer globally and matched with technology and market competence that Bekaert enjoys worldwide, this facility will also double Bekaert''s capacity in stainless steel wires.
Smart move by Mukand as it goes up the value chain, not forgetting that the realisations will jump up by 50 - 70 per cent as the company produces the highest end product for it''s line of business.The company will target world markets and will be looking for most sophisticated end users in the auto sector to pump up profits further. Going by the magnificent turnaround story of Mukand, a further capacity expansion in some years also looks like a possibility.
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