The Gujarat-based steel manufacturer, Steelcast Limited has announced that it would spend around Rs 107 crore on ramping up of its existing facility. The company is going in for capacity expansion riding back on the burgeoning demand coming in from both domestic market as well as global markets.
'We expect a humungous growth from the US and European markets', Chetan Tamboli, CMD told media in Ahmedabad yesterday. An estimated Rs 65 crore would be utilised for ramping up production facilities at the Bhavnagar factory. "The funds would be utilised to increase steel casting production capacity from existing 24,000 to 30,000 tonnes per annum in 2012-13 and then to 38,000 tonnes a year in 2013-14.
The company is also investing Rs 25 crore on machining activities, Rs 10 crore on equipment for energy conservation and another Rs 6.5 crore on environment and pollution control measures, according to Tamboli.
The official said that whole investment of Rs 107 crore would be funded through long term debt, internal accruals and advances from customers. "With the new capacities being established, we plan to double our turnover in the next three years. Our orderbooks are mostly full for the coming seven to eight months", Tamboli added.
Steelcast is likely to earn revenues in excess of Rs 225 crore in 2011-12. In March this year, the BSE-listed firm had announced a long term agreement with the $ 60 billion Caterpillar Inc to establish a dedicated plant to make steel casting products with specifications given by the US firm for the assured off-take capability. What is more, Caterpillare had also advanced an interest-free loan of $ 5 million (Rs 25 crore), to Steelcast, to be repaid over a period of four years. This would eventually increase Steelcast's sales to Caterpillar to Rs 150 crore per annum by 2015.