Steel Exchange India forms JV with Mauritius firm

Vizag-based Steel Exchange India and Mauritius-based SVR International Coal Limited have jointly formed a new company called Steel Profile (Mauritius) Company to import iron scrap at a cheaper price.

Steel Exchange India, a listed company, currently requires about 60,000 tonnes of scrap annually to run its steel melting unit located at East Godavari district.

"We have set up an office in the name of Steel Profile (Mauritius) Company in Mauritius. While Steel Exchange India's equity was 55 per cent in the new firm, SVR International Coal Limited holds an equity of 45 per cent. The main reason for forming the new company is to import scrap to India at reasonable prices to meet our raw material requirements," B Suresh, director of Steel Exchange India, told Business Standard.

"Our steel melting unit currently requires 60,000 tonnes of scrap a year. Now that we plan to expand the capacity by another 20,000 tonnes at an investment of Rs 10 crore, our scrap requirement will increase to 80,000 tonnes from next year," Suresh said.

"At present, we are purchasing scrap at Rs 15,000-16,000 per tonne in the local market. On the contrary, if we import the scrap, it will cost us only Rs 12,000-13,000 per tonne. We have, therefore, tied up with the Mauritius company," he added.

Steel Exchange India achieved a turnover of Rs 250 crore, while its net profit stood at Rs 4.5 crore in the first nine months of the current financial year.

"We expect to close the current fiscal with a turnover of Rs 300 crore," he said. "With this new company, we are planning to enter the steel trading business in other countries also," he added.

Steel Exchange India is also into steel trading, and the company trades 70,000-80,000 tonnes of steel in the four southern states annually.