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Mahindra Auto Steel, a joint venture between Mahindra Intertrade, China Steel Global Trading Corporation, Taiwan and Mitsui & Co. (Asia Pacific), today held the ground breaking ceremony for its steel service centre at MIDC's Chakan Industrial Area, Phase II, near Pune.
The centre is expected to be operational by January 2015. This facility will be set up at a cost of Rs 150 crore ($24 million) over 10 acres of land and will have an annual processing capacity of 130,000 tonnes. While Mahindra Intertrade will hold a share of 51 per cent in the joint venture, the other two partners will hold 24.5 per cent each.
“With this centre we are trying to re-engineer the steel supply chain model. We are bringing in a model that is prevalent and followed internationally. We will offer the full range of services from sourcing to customized just-in-time delivery solutions for all the auto manufacturers in the western belt,” said Harsh Kumar, Managing Director, Mahindra Intertrade.
This being an end-to-end services, Mahindra Auto Steel will take care of the entire bouquet of services such as sourcing, warehousing, yield optimisation, forex risk management and SKU-wise delivery and products such as blanks, trapezoids and profiles.
The initiative started in Pune will be testing grounds for the company’s further expansion. Kumar said that the two other regions that the company is looking at is auto hubs in the NCR and Chennai region.
Kumar explained that going ahead this business for Mahindra Intertrade will be driven by two features—proximity and services.
“We will have such processing plants near and around OEMs. The difference that we bring to table is variety of option. We will source steel from the best possible vendor. We are independent of steel makers,” he added.
This is Mahindra's seventh steel processing facility and the third in the Pune region. The raw stock for the facility would be imported from China Steel Global, Taiwan as well as sourced locally. However, Kumar said that there is no mandate for the JV to source steel only from China Steel.
When asked about demand for steel and if they have signed any anchor customers, Kumar said: “Mahindra would obviously be a customer. We are yet to initiate talks with others, but then the centre will come up in a year’s time. As for demand, 30 per cent of Mahindra’s steel consumption is imported steel. This is high grade steel that gets imported.” Mahindra Intertrade is a wholly owned subsidiary of the Mahindra Group. Intertrade owns and operates network of steel service centres across automotive, power and home appliance verticals.
