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Steelcast to invest INR 100 crore for expansion and upgradation

India’s leading steel castings manufacturer, Gujarat based Steelcast Limited, is going to invest around INR 107 crore for expanding and upgrading capacities so as to cater to the surge in demand coming from the domestic as well as global markets. With nearly 45% of its sales coming from exports, Steelcast is expecting strong growth in orders from the USA and Europe mainly.

A major part of the investments that is around INR 65 crore will be used in expanding production facilities at its Bhavnagar plant in Gujarat. In the first phase the steel castings manufacturing capacity will be raised to 30,000 tonnes per annum in 2012-13 from 24,000 tonnes per annum as of March 31, 2012. In the second phase, production capacity will be increased to 38,000 tonnes per annum in 2013-14.

Steelcast will spend about INR 25 crore on machining activities. Company will spend another INR 10 crore on equipment for energy conservation and around INR 6.5 crore on environment & pollution control measures.

Speaking about the expansion plans, Mr Chetan Tamboli CMD of Steelcast Ltd said that “The entire investment of INR 107 crore will be funded through long term debt, internal cash accruals and advances from customers. With the new capacities being set up, our aim is to double the company’s turnover in the next three years. We expect strong growth in demand for our products from both the domestic and export markets. Company’s order books are generally full for the coming 7 to 8 months.”

In spite of an economic slowdown globally, Steelcast has continued to post robust growth in sales and profits due to the fact that its main consumer industry, mining equipment, is on an up-trend. Mr Tamboli added that “India and the world are witnessing a spurt in demand for mineral resources like coal and metals, this in turn has led to significant increase in mining activities globally. We expect this trend to continue for some more years.”