DCW Ltd is planning to set up a Rs 100 crore plant for manufacturing soft ferrite grade iron oxide at its existing factory site at Sahapuram, Tamil Nadu. The company is weighing the foreign debt route for funding the project.
DCW has entered into a collaboration with International Steel Services Incorporated (ISSI) of the US through which the American firm will provide technical expertise for plant operations.
DCW vice-president (legal), W R D'Souza, told Business Standard that the plant is expected to become fully operational by March 1999.
The new plant will be manufacturing soft ferrite grade iron oxide by using the effluents from its upgraded ileminite plant as feedstock. Soft ferrite has wide applications in the software and electronic industry.
In the process, hydrochloric acid from the effluents will be regenerated for use in the manufacture of upgraded ileminite.
This gives the company the dual advantage of manufacturing the product as well as simultaneously disposing of the effluent from its upgraded ileminite plant, thus avoiding environment hazards.
Last month, the company's board had decided to go for a recast in an effort to concentrate on its core business activities, sale and manufacture of heavy chemicals and petrochemicals.
DCW demerged its property undertaking and investment unit into two new companies, DCW Estates Pvt Ltd (DEPL), and Crescent Finstock Pvt Ltd (CFPL). The two new companies will become group companies of DCW once the restructuring becomes effective. The company has called an EGM on 4 August to obtain the shareholders approval.
DEPL will focus on business centre actvities while CFPL will concentrate on mobilising resources for DCW Home Products Ltd.
DCW Home Products, the Captain Cook company, has plans to further their existing products of free flowing salt and flour and to diversify into other household products.
DCW officials said following the demerger, the two companies can develop their business and have access to funds independent of it.
Both the companies will issue their shares directly to the shareholders of DCW in the ratio of one equity share of Rs 10 each for every four shares of Rs 10 each held in DCW.
The shareholding pattern in these companies will be exactly the same as in DCW since the shares of the two companies will be issued only to the shareholders of DCW and in proportion to their shareholding in DCW.