Rama Steel Tubes Ltd today said it has commenced commercial production of second line at its Khopoli plant in Maharashtra, with an additional capacity of 36,000 MT.
Now the total installed capacity of the Khopoli plant stands at 72,000 MT, it informed.
The manufacturing unit at Khopoli has been the first venture of Rama Steel outside of North lndia. The first production line at Khopoli started production in June-2015 with a capacity of 36,000 MT, the company said in a statement issued here.
The production achieved in the first nine months of operations ending 2015-16 was 22,000 MT resulting in over 80 percent utilisation. The total capex for first production line was Rs 7 crore, it said.
Second production line has an installed capacity of 36,000 MT with the total cost of Rs 5 crore. The total capex for both the production lines (including land cost) has been Rs 12 crore, the statement said.
The company has two manufacturing facilities in Sohibabad and Khopoli with a total installed capacity of 1,32,000 MT.
The Khopoli plant is very strategically located, servicing the key high growing markets of Maharashtra, South Gujarat, North Karnataka and Madhya Pradesh.
These units offer an increased range of diverse and value added products like pre-galvanized tubes and enable the company to bring down the logistics cost, positively impacting realizations and profitability, it said.
The company proposes to further add a third line of production of additional 60,000 MT by Q1FY18, taking the total capacity to 1,32,000 MT.
"...We are looking at moving up the value chain of products, which we offer and cater to the high growing markets in the West. We have been able to set up manufacturing units at the lowest possible costs in the least possible time. These units will enable us to cater to higher demand in terms of both sizes of pipes and variety of products," Rama Steel Tubes Managing Director Naresh Kumar Bansal said.
Maharashtra and Gujarat are one of the fastest growing markets in the country. However even today, around 25 to 30 per cent of company's pipes requirement comes from other parts of the country. In fact we have been servicing these markets from our plants in Delhi, he said.
This strategic decision of setting up the plant in Maharashtra has enabled us to bring down our logistics costs and supply foster, bringing in operational efficiencies and achieve better profitability and higher return ratios, Bansal said.
