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W.S. Industries plans second production unit

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NEW STRATEGY: Murali Venkatraman (right), Vice-Chairman, WS Industries (India), and Narayan Sethuramon, Managing Director, addressing a press conference in Chennai on Tuesday.
NEW STRATEGY: Murali Venkatraman (right), Vice-Chairman, WS Industries (India), and Narayan Sethuramon, Managing Director, addressing a press conference in Chennai on Tuesday.

Special Correspondent

To invest Rs. 100 crore and expand capacity of the Chennai plant

Schroder Credit picks up stake in the companyWSI ties up with PPC Insulators of U.S.Plans to dilute stake in IT Park

CHENNAI: W.S. Industries (India) Ltd. (WSI), a well-known name in the Indian insulator arena, is setting up a second production plant with an investment of Rs. 100 crore. The plant, which will have a capacity to produce 8,000 tonnes of high voltage insulators, is expected to go on stream by April 2008. It will have a workforce of around 500.

Simultaneously, the company is expanding the capacity at its existing plant in Chennai. The expansion will involve an investment of Rs. 15 crore. Consequently, the capacity of the Chennai plant is set to go up to 16,000 tonnes from 14,000 tonnes a year.

Significantly, Schroder Credit Renaissance Fund, a global investment fund, had picked up 14.9 per cent stake in W.S. Industries. The fund had picked up 31.50 lakh equity shares at Rs. 67.30 per share. The total investment of the fund works out to Rs. 21.20 crore.

As it is gearing to expand, the company has struck a strategic and marketing alliance with the U.S.-based global major PPC Insulators, which has production units in seven countries and sales presence in over 100 nations. The tie-up will see PPC hawk the sub-station insulators manufactured by the Indian company for application up to 171 kV initially to its clients across the globe. Likewise, the Chennai firm will distribute PPC range of higher voltage (400 kV and above) products in India and neighbouring markets. The arrangement also facilitates PPC to provide technological support to WSI in plant design and specifications.

Addressing a press conference here on Tuesday, Murali Venkatraman, Vice-Chairman and Managing Director, WSI, said the company had not yet zeroed in on the location for the greenfield project. Currently, it was evaluating sites in Tamil Nadu, Gujarat and Andhra Pradesh, he added.

He said that post-preferential allotment of shares to Schroder, the promoters' holding in the company stood at around 42 per cent. The FII holding could be around 10 per cent and the public holding the balance.

The company, Mr. Venkatraman said, was also studying the option of raising debt to part-finance the expansion. He indicated that the company would raise the debt-equity ratio to 1:1.

Incidentally, WSI was also hoping to raise resources by diluting its stake in the IT Park that it was promoting along with a partner. The IT Park would come up on 18 acre that the company had owned once and sold to the joint venture for development.

The first phase of the proposed IT Park would go operational by June next year, he said. The IT Park would involve an investment of around Rs. 250 crore, he added.

WSI, he said, had realised Rs. 16 crore from the sale of the land to the joint venture company, which had since been reflected in the balance sheet.

Mr. Venkatraman said 50 per cent of the output from the new plant would flow back to PPC. According to unaudited results, the company had made a profit before tax of Rs. 5.35 crore for 2005-06 and sales of Rs. 147 crore.


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