Uttam Galva to upgrade service centre in Khopoli

Uttam Galva Steels, which supplies steel products to user industries such as automobile and the white goods sector, is planning to upgrade its steel service centre in Khopoli near Mumbai.

The move is aimed at strengthening relationships with its domestic clients and the company is also evaluating the possibility of entering new marketing relationships and tie-ups for supply of its steel products by leveraging the service centre.

A senior manager of Uttam Galva Steels pointed out that the company has already invested in additional equipment and technical staff to upgrade its facilities of the service centre, but declined to provide the specific details.

Steel companies use the service centres to supply the tailor-made steel products to their customer's requirements on a just-in-time production basis.

Uttam Galva's existing customer-base for its steel products include white goods makers such as Godrej Appliances, Bajaj Electricals and auto company such as Mahindra and Mahindra.

Uttam Galva buys five lakh tonne of hot rolled coils (HRC) from integrated steel producers and then converts them to higher value steel products at its production facilities located at Raigad district.

In the December 2007 quarter, the company's operating profit grew 16.3 per cent year-on-year basis to Rs 71.4 crore, while its net sales rose 12 per cent to Rs 582.69 crore. Its operating profit margin also improved 45 basis points y-o-y to 12.25 per cent in the third quarter of the financial year 2008.

In a bid to ensure backward integration, Uttam Galva has also drawn up plans for setting up a 1.5 million tonne steel plant on the border of Maharashtra and Goa. This project is expected to come on stream in the next two to three years, say analysts.