Bhavnagar-based Steelcast to invest Rs107 crore for expansion

Bhavnagar-based Steelcast Limited, is going to invest around Rs107 crore for expanding and upgrading capacities so as to cater to the surge in demand coming from the domestic as well as global markets. After investment, the company is looking to double its turnover in the next three years. At present, the turnover of the Steelcast is more than Rs200 crore and in next three years it is estimated to rise to more than Rs400 crore.

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 Rs65 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 (tpa) in 2012-13 from 24,000 tpa as of March 31, 2012. In the second phase, production capacity will be increased to 38,000 tpa in 2013-14.

Steelcast will spend about Rs25 crore on machining activities. Rs10 crore will be spent on equipment for energy conservation and around Rs6.5 crore on environment and pollution control measures.

Chetan Tamboli, CMD of Steelcast Ltd, said, "The entire investment of Rs107 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."

In spite of an economic slowdown globally, Steelcast is still eyeing growth in coming years. "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," said Tamboli.