Uttam Galva reports 100% export growth

Net profit up to Rs 94 crore on net sales of Rs 2094 crore

The company reported a profit after tax of Rs 94 crore on a net sales of Rs 2,094 crore.

The company, which has recently hiked its prices, has emerged as the second largest exporter of galvanised steel to the US market.

It is looking to export 1 million tonne of steel in the next two years. Uttam Steel has already crossed the milestone of one million tonne of cumulative steel exports since its foray into exports seven years ago.

"With our capacity expansion plans already in place with an investment of Rs 350 crore earmarked for this purpose, we are expecting to export one million tonne of steel in the next two years with focus on the US, Europe and Chinese markets. We are also venturing into new markets such as Australia and Japan," said Ankit Miglani, director of Uttam Stell.

Talking about the expansion strategy, he said, "The new cold rolling mill will increase Uttam Steel's cold rolling capacity to 7,50,000 metric tonne per annum while plans are afoot to introduce one more stand in 2006, whereby Uttam Steel is expected to reach a rolling capacity of one million tonne in 2006."

"In 2004-05, the US and China markets' export revenues were significantly higher than that of the previous year. We are expecting more business from China," he told Business Standard adding that Uttam Steel is also open to acquisition of units in China and other countries.

He, however, added that no decisions regarding acquisitions have been made as yet.

The company, which has its manufacturing facility at Khopoli near Mumbai, recently announced the successful commissioning of its latest state-of-the-art 6-HI reversible cold rolling mill.

With the commissioning of the new mill, Uttam Steel would be adding new size ranges for the four-wheeler segment, especially cars and commercial vehicles, and value added products such as roof, floors and bonnets, said Miglani.

In its Rs 350 crore capex plan, Uttam Steel would raise Rs 150 crore as debt while Rs 200 crore would come from internal accruals.

"The banks and financial institutions for raising Rs 150 crore debt have already been finalised and flow of funds has been ensured," said a company source.

In last financial year, Uttam Steel has earned its 40 per cent of export revenue from the US while 20 per cent of total export revenue came from the European countries. Interestingly, it has acquired a major chunk of business from China- around 15 per cent of its exports were to the Chinese market.

In 2004-05, Uttam Steel entered the Japanese market, followed by Australia and Canada. Uttam Steel had exported 3,88,000 tonne of steel in 2004-05 against its total export of 2,69,400 tonne reported in 2003-04, up by 44 per cent.