Launches ready-to-use steel.
Sujana Metal Products Limited, the flagship company of Sujana Group, is planning to set up a billet making unit with an investment of Rs 800 crore. The location of the 500,000-tonne capacity unit is yet to be finalised and would take a definite shape by December, according to Sujana Group chairman YS Chowdary.
The company would raise Rs 500 crore debt for the project and the remaining would be met through equity and internal accruals. This would be backward integration for the company, which deals in metal products.
Chowdary said plans were on to set up about 50 service centres that would process iron ore into bars of customised sizes in south India at an investment of Rs 1,000 crore in three years. The centres would particularly market Sujana Smart Steel, the cut-and-bent ready-to-use steel for use in constructions. The investment for these centres would come from internal resources and debt.
Launching the product here on Friday, he said Sujana would customise the bars according to the building structure plan and also deliver them at the construction site. “Smart Steel would help customers save Rs 1,200 a tonne in terms of labour costs and wastage that happens at the construction site,” he added.
With steel prices falling steeply, the top line of the company has taken a hit. However, it compensated this by increasing the sales volume after enhancing capacity to 530,000 tonne per month from the earlier 300,000 tonne per month. Sujana Metal’s turnover stood at Rs 2,200 crore during 2008-09 and the company expects to cross that by about Rs 200 crore this financial year on the back of increase in volumes.
This apart, it plans to acquire iron ore for giving them on lease. Also, there is a proposal to float a new company to bring the promoter holdings in various companies under one umbrella, Chowdary said.
