Williamson Magor to enter Real Estate development

Kolkata: Williamson Magor Group proposes to enter into real estate development in a big way, most probably through a new company to be constituted within the next six months.

Giving this information here on Thursday, Mr Deepak Khaitan, the Vice Chairman of the Group, said the Group already had large chunks of premium land in Tier I cities. “We’ll target tier II-III cities for acquisition of more land”, Mr Khaitan said.

Explaining the kind of development the Group had in mind, the Vice Chairman said, “We’ll develop everything from commercial complexes to townships depending on the opportunities.” The improved cash flow of the various Group companies would help mop up resources.

Mr Khaitan indicated that McNally Bharat Engineering Company, a Group company, would do the construction work for the proposed projects. “McNally Bharat has all the expertise to undertake such jobs”, he said.

Major expansion

McNally Bharat, according to Mr Khaitan, Chairman, was planning a massive expansion of operations in next few years. “The company’s turnover will touch the level of Rs 600 crore in 2007-08 and Rs 1,000 crore in 2008-09 and we’ve set the target of Rs 4,000 crore of in next six to seven years”, he said.

“Our current order book position of Rs 1,500 crore will rise to an estimated Rs 2,500 crore at the beginning of the 2008-09 fiscal.” The company was targeting acquisitions of firms, engaged in similar lines of activities, both within the country and abroad, most probably in Europe. “We’ve set our eyes on European firm with a turnover of $50 million and the due diligence will start soon”, he said. As for the domestic firm, the discussion on acquisition was still at a preliminary level.

New plant

At Asansol, the company was setting up a new plant within an initial investment of Rs 45 crore. “About 25 acres of land has been acquired and the project should go into stream by the end of this year”, he said, pointing out that the Asansol plant in due course, when the forging unit would be commissioned, would have a turnover of Rs 300-400 crore. “This is our major investment in West Bengal in past 20 years”, he said.

Further, there was a proposal to launch another green-field project in Bangalore, though on a smaller scale. “The land is available with us and about Rs 8-10 crore will be invested to produce engineering items”, he said.

During the quarter ended December 2007, the net profit of McNally Bharat increased to Rs 4.95 crore (Rs 3.83 crore) and total income to Rs 118.13 crore (Rs 112.89 crore). During first nine months of the current fiscal, the net profit amounted to Rs 15.33 crore (Rs 11.02 crore ) and total income Rs 344.15 crore (Rs 333.43 crore).