The company's plan for backward integration with a manganese steel foundry has now been put on hold, managing director of the Indian subsidiary of the swedish construction major, Sudhir Shrivastav, said.

Even the talks the company was engaged in with interested parties and financial institutions to take over existing foundries have been put on backburner, he added.

Earlier, Svedala India had plans to start construction of a foundry early June. The foundry would have started production in the first quarter of the year 2000 in its first phase with 2,500 tonne per annum capacity.

Now the production plan would be delayed.

Moreover, the company was in an advanced stage of outright purchase of some foundries apart from expanding the capacity of its factory at Bawal,Haryana. The plant, the company's first fully-owned plant in Asia, has a production capacity of 800-1000 construction equipment units.

Cetain companies and merchant bankers had offered manganese steel foundries to Svedala. But the construction equipment manufacturer has not shown enthusiasm for concluding the negotiations, financial institution, sources said.

"We had neither frozen the investment limit nor the capacity for the plant. We were planning to invest depending on the demand for construction equipments," Shrivastav said.

The company is studying the emerging political situation to decide on the course and speed of its future investments. "We will closely read the intentions of the new government before putting in more funds," he added.

The company has so far invested Rs 20 crore in its Bawal plant, offices and 55 employees. It has a Rs 75 crore approval from the Foreign Investment Promotion Board.

However, Svedala views India as a strategic market and remains committed to the country in thelong term, he asserted.

Svedala is a world leader in development and production of equipment and systems for infrastructure. Its equipment find application in construction, mining, aggregate and mineral processing and bulk material handling sectors.

Though the bookings for the second quarter of this calendar year have not grown compared to Rs 16 crore in January-March quarter, the basic tenets of the market have not changed, the company MD said.

Acknowledging that the profits for this year are likely to fall with the decline in volumes, Shrivastav said that the company is on course to triple its present Rs 75 turnover to Rs 225 crore by the end of 2003.

Despite the unlikely pick up in construction activity in the near future, he expressed confidence of achieving the targetted volumes as Svedala has so far introduced only 20 per cent of its world-wide products in the country.

Several bulk-material handling equipment like speciality conveying systems, feeders, conveyor accessories and ship loaders aredue to be launched in the country, he added.