Velagapudi Steels eyes Rs 100-crore turnover

Visakhapatnam-based Velagapudi Steels Limited (VSL), which started commercial production in December last, is aiming at a Rs 100-crore turnover during the financial year 2006-07.

The company has invested Rs 22 crore to set up this 60,000-tonne capacity thermex technology steel rebars production unit.

"Last financial year, we achieved a sales turnover of Rs 7 crore. This year, we would produce about 45,000 tonnes of rebars so as to achieve a sales turnover of Rs 100 crore," V Gopala Krishna Prasad, chairman and managing director, VSL, told Business Standard.

In the current year, VSL would line up Rs 2.5 crore to expand its production capacity to 1 lakh tonnes from the existing 60,000 tonnes. "Such a huge capacity expansion is possible at such a small investment because we have all the necessary infrastructure. Therefore, we are taking up the expansion immediately," Prasad said.

VSL produces rebars ranging between 8 mm and 32 mm in size using billets as raw material.

"Though we have the option of using sponge iron as raw material for making rebars, we are using billets to ensure better quality. The latter costs Rs 1,000 more per tonne. However, cost is not a deterrent when it comes to ensuring quality," he said and added that the use of high quality steel products in RCC buildings would cut down construction cost by 10-15 per cent.

"Unless we maintain quality and cost-effectiveness, it will be very difficult to run a secondary steel unit successfully. That's why we are asking the government to supply quality billets from Visakhapatnam Steel Plant and SAIL on a discount," he said.

Prasad maintained that VSL followed a uniform price method for its products. "Normally, our dealers sell VSL products at prices recommended by the company. This ensures that even small customers get VSL products at as much price as anybody."

The company was planning to open 18 exclusive outlets in the state over the next two years, he added.