Rajratan Global Wire to Enter Wire Rope Production
Indore-headquartered Rajratan Global Wire Ltd., a manufacturer of Steel wire, will be foraying into production of wire rope, and will be procuring necessary equipment for installation at its plant in Pithampur, Madhya Pradesh. The company is targeting 10,000 Tonne Per Annum (TPA) of wire rope production capacity.
Mr. Sunil Chordia, CMD of Rajratan Global Wire, shared during the company’s FY-25 earnings call that this production of wire rope is expected to begin in the next 3 to 4 quarters.
Investment of Rs. 50 Cr. Expected to Create Rs. 100 Cr. Revenue
Rajratan Global wire will be investing about Rs. 50 crore, to be funded through a mixture of internal accruals and debt, to set up wire rope manufacturing in Pithampur. Through this investment, the company expects to generate an annual revenue of about Rs. 100 crore.
Out of the total investment, 50% will be spent on acquiring the machines, whereas the remaining 50% will be spent on developing the necessary infrastructure at Pithampur. Even though the new wire rope manufacturing facility will be housed in the Pithampur plant, it will involve the construction of a 10,000 sq.m shed, shared Mr. Chordia. He added that the company is excercising caution and “…once we are successful in this product, maybe 2, 3 years down the line, we plan a bigger investment in wire rope business”.
Move Targeted to Improve Profitability of Pithampur Plant
Ratanraj Global Wire has two factories in India, one at Pithampur, and the other in Chennai. Out of these, the Pithampur plant is older whereas the Chennai plant has been recently commissioned.
While explaining the rationale behind venturing into wire rope, Mr. Chordia explained that as the company’s Chennai plant picks up, there is a possibility of business from many of Rajratan Global Wire’s customers moving to Chennai. He elaborated, “…to keep the Pithampur factory as profitable as it was, we have decided to add value to our current product line”.
Wire rope offers better profitability and is a value added product as compared to black wire. Rajratan Global Wire has the capability to produce 12,000 TPA of black wire at its Pithampur plant. “…We have a lot of customers who make wire rope out of the black wire we supply to them”, explained Mr. Chordia.
Wire Rope Production Profitable Utilisation of Company’s Cash Flow – Company CMD
Mr. Chordia shared that till now, the company has been focusing on the production of bead wire, which are used in manufacturing tyres. Rajratan Global Wire’s consolidated bead wire production capacity stood at 1,20,000 TPA as of 2024.
However, as for the company’s future outlook on bead wire, he said, “…going forward, we don’t see a very high scope of growth and investment in bead wire…We are already biggest supplier in India. We are the biggest supplier in Thailand, which are 2 big markets in Asia”.
He added that the company’s investment in wire rope manufacturing is also a way to utilise its cash flow in some profitable business.
About Rajratan Global Wire Ltd.: Rajratan Global Wire Ltd. was established as Rajratan Wires Pvt. Ltd. in 1988. In the 1995, the company started manufacturing bead wires used in tyre industry. The company has 2 factories in India, one in Pithampur, MP and the other in Chennai. Apart from this the company also has a manufacturing facility in Thailand, which was established under the name of Rajratan Thai Wire Co. Ltd. in 2006. During FY-25, the company’s topline stood at Rs. 935.25 crore.
