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Home arrow News arrow Alliances and Joint Ventures arrow Texmaco and United Group JV to set up new facility in West Bengal
Texmaco and United Group JV to set up new facility in West Bengal Print E-mail
Written by Ganesh, Viswanath   
Friday, 22 May 2009
Kolkata : KK Birla group company Texmaco Ltd and Australian firm United Group Ltd have formed a 50:50 joint venture to manufacture hi-tech wagon and locomotive bogie frames Indian Railways, private industry and export.  The company has requested the state government for 100 acres of land to set up a modern manufacturing facility.

United Group is one of Asia Pacific’s leading end to end rail technology solution providers. The Texmaco - United Group JV is expected to begin working out of Texmaco’s existing premises until the new plant is set up.

The JV will also explore opportunities thrown up by the Center’s plan to create dedicated freight corridors linking Delhi-Mumbai and Delhi-Kolkata.

According to Mr. Ramesh Maheshwari, president and CEO of Texmaco, the Company expects to play a pivotal role in the Indian Railways’ new plan entailing an outlay of Rs.2,30,000 crore in the 11th fifth five year plan and is moving forward with suitable tie-ups with multi-nationals to exploit the business opportunities thrown up by the Rail segment. The company has already been awarded the highest order of 3455 wagons by the Railways for 2008-09. Texmaco has also received orders from Chittaranjan Locomotive Works (CLW) to manufacture Loco Components.

Despite the global economic slowdown, the company’s turnover was up by 16%  to Rs. 1091.25 crore during the last fiscal ending March 31, 2009 as against Rs.943.52 crore in 2007-2008.

The current order book of the Company is around Rs.1300 crore, which would enable it to maintain smooth production during the current year. It would stand to be further augmented by the Railway orders under planning for 2009-10.

Texmaco's Gross Profit (PBDT) was up by 12% to Rs. 122.73 crore (against Rs..109.58 crore) and Profit Before Tax (PBT) by 11% to   Rs. 110.92 crore. (against Rs.100.08 crore), in the previous year.  The Net Profit rose by 10% to Rs. 75.84 crore (against Rs.69.09 crore. in the previous year) after providing for a higher tax liability of Rs. 35.08 crore (against Rs. 30.99 crore in the previous year). The performance of the Company was to some extent impacted due to deceleration in export sector resulting in deferment of acquisition plans of wagons by the private operators. 

The Company earned the distinction of being the only one to have established series production of the bogie covered SS BCNHL wagons, direly needed by Indian Railways for transportation of food grains and other commodities requiring weather protection.  The company has received a certificate from the Association of American Railroads (AAR) for manufacture of Side Frame, Bolster and Center Plate for the US market.

The Rolling Stock Division of the Company recorded impressive performance. The turnover of the Division was higher by 16%.  In recognition of its outstanding performance in the industry, the Company was awarded the highest order of 3455 wagons by the Railways for 2008-09. These orders were released belatedly owing to the attending delay in evolution and freezing of the new hi-tech design by RDSO. Texmaco, however,  took the lead in the industry in production thereof. In fact, the Company earned the distinction of being the only one to have established series production of the bogie covered SS BCNHL wagons, direly needed by Indian Railways for transportation of food grains and other commodities requiring weather protection.

The Steel Foundry Division achieved a higher turnover of Rs.223.80 crore against Rs.173.40 crore in the previous year despite the fact that the 2nd half  of the year was  subjected to an unexpected pressure under the impact of the adverse global business environment.  The margins were affected owing to steep escalation in the cost of inputs for the greater part of the year.  However, in sync with the global trend in commodity prices, the costs have lately started coming down and have stabilized. 

The Division has established its export base for hi-tech precision castings to serve prestigious multi-national clients, but it may take some time to pick up the pace of exports depending upon the global economic situation.

The Hydro Mechanical Equipment Division achieved a 10% higher turnover at Rs.66 crore, and established design and project management capability by successful commissioning of 1020 MW Tala Hydro Electric Project at MWL 1363, a very difficult terrain in Bhutan. The Division also made a breakthrough in Railway Bridge segment by securing an important order.

 
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