Gravita India entered into is a joint venture agreement on October 10 with the Best Group of Saudi Arabia Dammam, clarified president MC Mehta of the company. He indicated that the name of the company is
proposed to be Best Gravita Saudi Ltd. "The two companies will be 50-50% partners in the joint venture," he added.
Here is the edited transcript of his interview. Also watch the accompanying video.
Q: After you completed 100% acquisition of Metal Inc, you indicated that your topline and bottomline would increase. At an operating level, would the EBITDA margins improve on account of this?
A: The acquisition in Metal Inc at Kathua is already processed and the production has started. We have entered into is a joint venture agreement on the October 10 with a Saudi company.
We will setup a joint venture in Dammam, Saudi Arabia. This joint venture agreement is for a capacity of 7,200 metric tonne per annum. The power plant is expected to be operational within a year’s time.
Q: Could you give us more details with regards to this joint venture? What is the percentage of holding between the two companies?
A: The two companies will be 50-50% partners in the joint venture. The name of the company is proposed to be Best Gravita Saudi Ltd. The Best Group of Saudi Arabia Dammam and Gravita India have entered into this joint venture.
Q: Could you give us a rationale on creating this JV? How will this benefit the company? Will it be backward integration so that you benefit operationally or will it add to your revenue?
A: It will be lead battery recycling plant for the production of lead and lead products in Saudi Arabia, including fine lead. This will be one of the further diversification ventures that we would be working on.
The battery scarp available locally will give us the raw material required for the plant. Since Saudi Arabia has many automobiles with good availability of raw materials, we expect the plant to do well.
Q: What will be the equity infusion in the joint venture for Gravita India? Once you are operational, one year later, what can we expect by way of revenue and profitability from this JV?
A: We have envisaged the total investment of USD 6 million. It will be between the two partners, banks and the financial institutions.
Q: You undertook some amount of divestment or disinvestment in Gravita Georgia LLC. How much have you picked up in terms of cash from that?
A: The disinvestment in Georgia was our small venture. We didn’t find it as a profitable proposition, so we decided to disinvest in that.
Q: How much did you sell it for?
A: We didn’t sell it for a hefty sum, it was a minority sum.
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