JV in US with Michigan Steel to tap this huge market
HIghlights:
- Gujarat-based Steelcast Ltd. and Michigan Steel of USA have formed a 50:50 JV, Steelcast LLC, to tap the huge US castings market
- Inspection team from the US Railway to come within a month to give final approval for supplies from Steelcast’s manufacturing facilities at Bhavnagar
- Steelcast JV in the USA has potential to generate Rs 200 crore revenues over next five years from US Railways demand only
India’s leading steel castings manufacturer, Gujarat-based Steelcast Limited, is getting ready to tap the huge multi-billion dollar US Railways demand for castings. As part of the last lap of getting certified by the US Railways, an inspection team is coming from the USA to inspect the company’s castings manufacturing facilities located at Bhavnagar in Gujarat. Once the approval is received in a couple of months, Steelcast will become only the second such company from India.
In June 2010, Steelcast Ltd. along with Michigan Steel, USA had formed a 50:50 joint venture company, Steelcast LLC to tap the huge potential for castings in the USA, especially the US Railways for freight transport, which is one of the biggest in the world. Steelcast also has a technical and marketing alliance with Michigan Steel.
Elaborating on the strategy adopted by the company for fast-paced growth in the coming years, Mr. Chetan Tamboli, Chairman & MD of Steelcast Ltd, said, “The US Rail demand castings is so huge, that over the next five years we expect our US JV to post revenues in excess of Rs 200 crore. In the first year itself, that is 2012-13, we expect sales of Rs 40 crore from Steelcast LLC. The US Rail certification will also give us a big advantage over other players while bidding for contracts from the Indian Railways in future, especially the huge multi-billion rupee opportunities that will emanate from the upcoming Delhi-Mumbai Freight Corridor.
Mr Vaughn Makary, President & CEO of Steelcast LLC said, “The US markets for steel castings are huge and the US Railways constitutes one of the biggest part. We have tied up with India’s Steelcast Ltd. as their manufacturing facilities are world-class and their product pricing is very competitive, especially against the major steel castings players from China.”
The Indian Railways have already extended Class-A Foundry Status to Steelcast and sample orders for manufacturing couplers have been received. Further, the Association for American Railways (AAR) approval is at an advanced stage. One of the North American companies has already placed an order with Steelcast to manufacture railway castings for US Railways. This company is very actively interactingwith Steelcast for facilitating the AAR approval at the earliest possible.
