Uttam Galva Steels eyes Rs 1260 cr exports

Mumbai-based Uttam Galva Steels is targeting Rs 1,260 crore of exports by the end of the current year, with at least 10 per cent of this coming from China.

Uttam Galva, India's second largest exporter of galvanised steel, had recorded exports worth Rs 900 crore at the end of the third quarter of the current fiscal.

The Rs 1,250 crore company is adding 25,000 tonne per month (tpm) capacity to its Khopoli plant near Pune at Rs 350 crore. Currently the facility has a 40,000 tpm capacity of rolling production.

The revamped plant is expected to be commissioned by March 2005.

Anuj Miglani, deputy managing director and chief operating officer of Uttam Galva, said, "We are hoping to achieve exports of Rs 1,260 crore by the end of March 2005. Most of the exports revenue would come from the US and European countries, Italy, Belgium and UK. We expect to earn around Rs 125 crore of business from China. In fact, with the recent surge in demand of galvanised steel in Europe and keeping in mind the interest of global players to buy quality steel from India, we are expecting to achieve a turnover of Rs 3,500 crore by the end of fiscal 2005-06 against gross sales of Rs 1,220.55 crore reported in the last fiscal."

"Uttam Galva had earned exports of Rs 742.11 crore during fiscal 2003-04, while it had clocked domestic sales of Rs 478.44 crore."

Saying that manufacturing cost of galvanised steel in India is 25-40 per cent lesser than that in developed countries, Miglani said, "Looking at the prospects of increasing demand from exports, we are going to add two products "" wider cold rolls and colour coating. While wider cold rolls is at present being imported by India and there is a huge domestic demand along with potential export markets, colour coating, a product mainly for construction industry and white goods production, would be manufactured by us keeping in mind both overseas and domestic markets."

Uttam Galva would opt for debt funds worth Rs 200 crore from banks and financial institutions, while Rs 150 crore would be funded through internal accruals.

Miglani also said China would remain as an important market for the company for at least one more decade, in spite of the fact that usage of low-quality steel is extensive in China.

"With the kind of infrastructure happening there, Indian galvanised steel manufacturers can be assured of a good market demand from China, though looking at better prices we are trying to concentrate more on the US and European markets. Even now Australia has become a happening market for us and we are expecting good business from that country in the next few years."

During the third quarter of 2004-05, Uttam reported gross sales of Rs 524 crore against gross sales of Rs 268 crore reported during the corresponding period of the previous year, thus showing an almost 50 per cent rise in its turnover.