Jindal Stainless is hiving of its lifestyle products and architecture divisions into separate companies. Company sources said the latest move is aimed at helping both businesses grow through the organic route as well as by going in for acquisitions oistrategic tieups..A senior group executive said"We have just taken the decision to demerge the two business divisions into separate companies. Once these businesses are separated, they would work on their independent growth strategies." Sources further even said post-demerger, the group plans a massive scale-up of operations in the two businesses. It has internally setup a target of achieving a combined turnover of Rs 500-700 crore from the two businesses in the next three years. Jindal Stainless architecture division was formed to develop the use of stainless steel in infrastructure and new application areas. This division provides comprehensive project services, including planning, designing, fabrication and erection on a turnkey basis. The lifestyle product Artdinox-was set up to design and produce stainless steel artifacts. The main focus of this division is pioneering technical innovations and innovative designs from stainless steel. A group executive said"Both the divisions have been successfully established and require managerial skills that are different from the core stainless steel business."Besides pursuing inorganic growth plans, sources said the demerger move is aimed at enabling both businesses to develop their own capital raising initiatives to finance their expansion and growth plans. These two businesses, however, will retain their close working relationship through a scheme of arrangement with the parent company from which it would be sourcing the materials."
Posted On : 11/4/2005 4:23:42 PM