Lakshmi Machine Works (LMW) is taking the inorganic route to enhance its capacities.
The company is forced to expand its capital by the increasing demand for textile machinery, long delivery schedule and the need to retain its customers, besides expected ones.
Rs 150 crore have been allocated for this capacity enhancement for the year 2005-2006.
The company has notified the Bombay Stock Exchange, Saturday, about its decision to acquire Jeetstex Engineering Ltd (JEL), a sick public company operating in the same space at the estimated cost of Rs 35 crore.
More acquisitions have been lined up for future say company sources, who added that these would be restricted to spinning and the very next post-spinning phase (like winders and doublers) in the machinery manufacturing process.
Once deal is finalised, the company proposes to put this merger proposal into effect from April 1, 2005.
Company would go for fast track clearance and expects the processing done within next three or four months.
After this acquisition, LMW hopes to add another 20 percent to its production of castings for its captive needs and JEL's spares and accessories division would be able to add to manufacture of spindles for the ring frames of LMW.
On the order-book front, an official informed that LMW stood at Rs 2500 crore and was on the growth path, regardless of the competition from textile machinery manufacturers from China and importsof second-hand machinery.
With the setting up of mother machinery, LMW has set this capacity-building exercise in motion.
marketing@alchempro.com
