Sale of Steel Plant to Clear the Debt is the Best Option to be Executed, Rajeev Jhawar Usha Martin

Rajeev Jhawar Usha Martin Biography:

Rajeev Jhawar, the son of Brij Kishore Jhawar, is an Indian industrialist with over three decades of experience in strategic management. He is an alumnus of Ranchi University and London Business School. He started his journey as Sr. Vice President (Commercial) and became the Managing Director of Usha Martin Limited in 1998. He has been the Managing Director at Usha Martin Limited since May 19, 2008, and in the three decades that he has been at the helm of the Usha Martin Group, he has accelerated growth, built a meritocracy and enhanced stakeholder value.

Rajeev Jhawar Usha Martin

Usha Martin started its business as a wire rope manufacturing company. The group has set new standards in the manufacture of wire rods, bright bars, steel wires, speciality wires, wire ropes, strand, conveyor cord, wire drawing and cable machinery…The company is also in the business activities of Steel, Wire & Wire Ropes.

Rajeev Jhawar UshaMartin is the Director of Neutral Publishing House Ltd. He graduated from London Business School and completed Management Development Course at the University of Pennsylvania. Rajeev Jhawar has been Vice Chairman of Usha Martin Education & Solutions Limited since September 2010. His leadership qualities, sharp business acumen, in-depth understanding of business administration and strategic decision making has taken the Group to an altogether higher growth trajectory.

Product innovations under the leadership of Rajeev Jhawar:

Usha Martin under Rajeev Jhawar is on a new start. After all that had happened in the recent past, the company is in the path for a new start. And it has already taken sprout under the leadership of Rajeev Jhawar Usha Martin. The company’s global R&D centre in Italy is actively engaged in the design of wire ropes and uses property design software to develop products. The company also has a comprehensive R&D facility in its manufacturing unit at Ranchi. “Product innovation that meets the customers’ needs is a continuous process for us. We are a major supplier of several OEMs,” explains Devadip Bhowmik, director, sales & marketing, UML.

The market leader in India in wire ropes, Usha Martin has the capacity to produce a wide range – from 4.8 mm to 130 mm in diameter – of wire ropes. “Our USP is diverse quality products that cater to large customers,” adds Bhowmik. “It is the concept of a ‘super market’, where one can pick up everything under one roof.”

Rajeev Jhawar, the saviour of debt struck Usha Martin:

According to Rajeev Jhawar Usha Martin, the total debt is around 4500 to 4600 crores including the long term as well as all the working capital. With the transaction with TATA steel, the company is expected to repay almost all its debt. The wire rope will have a very strong residual company with a very strong balance sheet with an annual profit between 250 to 300 crores on a consolidated basis. Rajeev feels that this is a business that can grow Usha Martin has been a global leader. In wire group business, Usha Martin has the leadership position in the country and they are among the top 4 players in the world. In the past 3 or 4 years, the company could not invest in this business because of its over-leveraged position. By selling the steel plant, Rajeev Jhawar Usha Martin expects that they will be able to expand their wire rope and wire business as there would be very good cash flows generated.

Rajeev Jhawar feels that going to be a debt-free company, with the global leader in the wire rope business they have the opportunity to have good growth over the next 3,4 years. They also expect good growth both in terms of a top line and bottom line.

Rajeev Jhawar would wish a growth of at least 15 to 20% per year. It may take a year to build up the capacities in these areas. After that he is sure, that would be a then ongoing basis. They can expand and grow at this rate over the next few years.

Rajeev Jhawar also points out that 60% of their revenues are going in terms of EBITDA. The steel cycle has improved and over the last 2 quarters, the company has had a turnaround. It has been able to improve its bottom line both in the steel and wire rope business. Rajeev Jhawar Usha Martin thought that it would be a good opportunity to sell the steel business at these levels so that they can get a better valuation. This along with a better balance sheet, they have a solid rope business that can grow.