Steel Strips in for Rs 148-cr expansion

Chandigarh-based Steel Strips Wheels Ltd is set to invest Rs 148 crore to increase its capacity at its existing plant at Lalru.

The company is the only manufacturer of automotive wheel rims in the north, and it supplies to automobile majors like Maruti, General Motors, Honda, Bajaj, and Mahindra and Mahindra.

As a result of the present capacity expansion, the production will be increased from 2.4 million automotive wheel rims per year to 7.5 million wheel rims per year.

"The boom in the automobile manufacturing is the factor behind the increase in output and we are major suppliers of automotive wheels rims to Maruti and Honda," said Dhiraj Garg, the managing director of the company.

He said the state-of-the-art machinery has been imported from Japan, Korea, Germany, Italy and Ukarine to produce best quality products. The company is exploring the possibilities of selling their products in European counties, Australia and South Africa and by the end of 2007-08 about 10 per cent of the total output will be sold in the global market.

According to Garg, after the completion of the project, Punjab will become the largest automotive wheel rims in the country and will invite other automobile manufacturers to set up their shops in the region.

The scale of production would also facilitate the tractor manufacturing facilities in north as wheel rims will be available to them locally and will become more cost effective, indicated Garg.

The company also plans to foray into the international market in the near future and has a target to export 700,000 wheel rims for cars and MUVs in 2007-08. Garg added that a proposed export of 1 million wheel rims in 2008-09 and 1.5 million wheel rims in the next year would add $ 16.5 million per annum to the state's kitty.

This mega project of steel strips would help the state government to earn Rs 150 crore to Rs 200 crore in the form of excise duty. The project is expected to generate an employment for about 3,000 families in the region. He apprised that Tata Steel and Ispat are the major supplier of raw material.

He said that the upward revisions in the steel prices in the past few years have eroded the profit margins. A part of it can be passed on to consumers but in the competitive world it is not possible to transfer the entire burden to our buyers.

"Moreover the the freight charges that is about Rs 29 per wheel from Punjab to the sea ports makes it less viable to export the product", added Garg.