Uttam Galva in Rs 100 cr capacity expansion drive

25,000 tonne new capacity to be added by March

Uttam Galva Steel, the country's second largest galvanised steel manufacturer, is investing Rs 100 crore to expand capacities in its service centre for steel processing and distribution.

"The centre will focus on steel retailing at industry level and will provide cutting, slitting and steel blanking services. We will focus on just-in time delivery and inventory management as well," said Ankit Miglani, director.

At present, the centre has installed capacity of 5,000 tonne per month (tpm). In the first phase of expansion, additional capacity of 25,000 tonne will be added by March. And by December the company expects total capacity to touch 50,000 tpm.

The company claims the expanded service centre will be the first of its kind to be set up indigenously. The centre will cater to auto engineering and white goods industries. "It is primarily focussed on the domestic market, with an eye on exports" said Miglani.

The Rs 2,500-crore company is banking on outsourcing the processing needs of foreign multinationals. The reduced costs, which is up to seven times lower than the international levels, will help improve margins for these companies.

"We are also conditioning for the long-term surge in the auto sector. The service centre will help when more car makers relocate their manufacturing units to India," said Miglani.

The company sells about 70 per cent of its galvanised steel and almost half of its cold rolled products in export markets across 115 countries.

In the domestic market, the company supplies CRCA (cold rolled cold annealed) to sectors such as auto, general engineering and white goods. Its clients include Bajaj auto, Kirloskar, L&T and Mahindra & Mahindra.

Uttam Galva's scrip today closed at the Bombay Stock Exchange at Rs 38.35, down 2.29 per cent from yesterday's close of Rs 39.25.