Calcutta, Aug. 23: French steel major Usinor is likely to pick up a stake in the Tinplate Company of India (TCIL), one of the largest tinplate manufacturers in India.
Sources said the French company has already held talks with the Jamshedpur-based firm in this regard. “If all goes well, the deal is going to be through soon,” they added.
The Usinor team has already visited the TCIL’s manufacturing facility a number of times and provided some technical inputs. However, this informal partnership will be converted into a formal once the French major picks up a stake in the Indian outfit, they added.
“The Usinor team frequents our plant at Jamshedpur every quarter and gives us valuable inputs in terms of expertise so as to add value to our products. We are in active talks with the company to extend the relationship into a business partnership,” TCIL managing director Busen Raina had said earlier.
Raina however remained non-committal about Usinor’s plan to take up stake in TCIL. He said currently, the talks with Usinor are for a technical and marketing collaboration.
TCIL, which had been in the red for quite sometime, bounced back into the black last year following a financial restructuring package prepared by the financial institutions led by ICICI.
Now the company is planning to double its capacity to 250,000 tonnes in view of the increased demand abroad. Currently, the company is busy expanding capacity to 125,000 tonnes from 110,000 tonnes mainly through ‘de-bottlenecking’ exercise. Asked whether Usinor will help TCIL in finding buyers abroad, the sources said nothing concrete has yet been decided. “But if the French company finally decides to acquire the stake, the marketing alliance is only a matter of time to come through,” sources said.
The management however is optimistic about TCIL’s performance in the current financial year following the second phase of restructuring by the financial institutions. The company is looking at the export potential of its products since the demand is growing in Asian countries.
Last year the company earned around Rs 50 crore from exports which is 15-18 per cent of the overall turnover. “This year, we have a target of exporting 25 per cent of our products and our ultimate aim is to raise our export level to 35 per cent to the turnover,” sources said.
Tata Steel, which promoted the company, is helping TCIL not only in terms of giving raw materials but also providing great marketing support both in India and abroad.