FMCG- company KKN Group has acquired mild steel ingot producing Balaji Ispat to foray into the steel sector.

The cost of acquisition, which includes modernisation and expansion costs is estimated to be around Rs.60 Cr.

70% of the amount will be financed partly with bank credit and the balance from company’s resources.

Founded by Suresh C Maheshwari, Balaji Ispat Pvt Ltd is located at Dankuni, Kolkata and is engaged in manufacturing of MS ingot, TMT bars, sheets, billets and castings.

Transaction Reference: BS

After the acquisition, KKN plans to modernise and expand the manufacturing capacity of MS Ingot from existing 72 TPD (tonnes per day) to 170 TPD and set up a hot rolling mill and TMT with a manufacturing capacity of 200 TPD.

KKN also plans to set up a plant at Kalna in Burdwan,West Bengal, for which it acquired 24 bighas. here, it will set up extraction and refinery units with an expected production capacity of 200 TPD.

It is also looking at refining of soya oil with a production capacity of 500 TPD in Haldia, for which it will set up a project with an investment of about Rs.250 Cr by 2013.

KKN Group is a group of seven companies (Mahabir Impex Pvt Ltd, Everbright Trade Com Pvt Ltd, Grover Commerce Pvt Ltd, Cotwall Commerce Pvt Ltd, Haridarshan Tracom Pvt Ltd, Goodvalue Trexim Pvt Ltd, Tie Up Trading Pvt Ltd) of which five companies are engaged in wholesale trading of FMCG products like various types of edible oils, tea, soyabean chunk, atta, maida, sooji, papad, maize etc. One company is running a rice mill at Burdwan in West Bengal and another group company is engaged in wholesale trading of organic fertilizer.

KKN group has presence in edible oils through 'Tripti' and 'Sunshine' brands. It also markets organic fertilisers under 'Aditya' brand.

It has four factories for edible oils, tea, soya chunk and other products situated in West Bengal.

KKN plans to produce malleable iron castings for use in engineering industries, railways, wagon industry and auto sector. The group which has so far been present in trading and retailing of edible oils, has now decided to focus on manufacturing.

Steel Industry is seeing a lot of M&A deals this year. Recently, Shyam Steel has announced to acquire a majority stake in Orissa-based Beekay Steel. Concurrent (India) Infra is also acquiring Pune-based Vakratund Ispat and KIOCL is acquiring Hospet based sick PSU Tungabhadra Steel Products Ltd.

Few months back, Essar Steel has acquired UK largest steel processor Oakside Solutions Ltd, while Jindal Steel & Power acquired Oman based Shadeed Iron & Steel for $500 Mn.

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