Announcing its diversification into the power sector, JK Organisation on Tuesday said it planned to set up a 1,360 MW power plant near Jhansi in Madhya Pradesh with an investment of around Rs. 1,300 crore within two years.
The company will set up a new entity to run the power business, which it hopes to be one of the major contributors to its revenue.
“Yes, as a group we are venturing into the power sector. To start with, we will be confined to thermal power plants. We are putting up a 1,360-MW power plant near Jhansi in Madhya Pradesh,” JK Tyre & Industries Vice-Chairman and Managing Director Raghupati Singhania told reporters here.
He said, in the first phase, the group would start a 660 MW plant within the next two years. “In the first phase, the total investment will be Rs.1,300 crore,” he said.
Mr. Singhania said this project was basically a commercial project and the business would be controlled under a separate entity. “We will form a special purpose vehicle (SPV) in the coming days. The power sector is very huge and we expect this to become a major revenue generating business. However, I cannot quantify it right now,” he said. On the financing of the project, he said the group would raise funds. JK Organisation has interests in a range of businesses, including tyres, paper, cement, sugar and seeds.
Updating on the tyre sector, Mr. Singhania said JK Tyre & Industries was looking to advance the opening of its upcoming plant in Chennai in order to meet the growing demand. “As the demand is growing, we are trying to expedite for an early operationalisation of the Chennai project. The plant will be ready by the end of this year from an earlier schedule of around May-June 2012,” he said.
The Chennai plant will have an initial capacity of 25 lakh passenger car tyres and four lakh truck and bus radial tyres annually. The firm is investing Rs. 1,000 crore on the plant. He said in due course, when demand grows, the capacity of the plant could be increased by 3-4 times.
The company on Tuesday showcased a range of footwears manufactured from its used tyres in association with Footwear Design & Development Institute.
