The Hindu Business Line : Indian Seamless group companies back on track

FROM being referred to the Board for Industrial and Financial Reconstruction (BIFR) to cash breakeven and operating profits, the companies of the Pune-based Indian Seamless Group, seem to have done a turnaround after a gap of four years.

Mr B.R. Taneja, Chairman, Indian Seamless Metal Tubes Ltd (ISMT), told Business Line that the company which went through a rough patch after taking over the Baramati-based Kalyani Seamless Tubes Ltd in 1999, has begun a new era with its achieving cash breakeven in the third quarter and the nine-month period of the current fiscal.

Giving details about the Baramati plant, Mr Taneja said that the capacity of the plant is 9,00,000 tonnes and pointed out that all these years the capacity had been `underutilised'.

"As of now, the capacity utilisation is close to 80 per cent which was increased from 67 per cent and achieved through de-bottlenecking,'' he said.

Asked whether there were plans for major investment in the Baramati plant, he said that there were no proposals for heavy investment. "But investments would be made in the plant for routine maintenance and other sundry expenses,'' he said.

Indian Seamless has already invested close to Rs 3.5 crore for the current fiscal in the Baramati plant. The plant, which is currently catering to medium-sized casings, would be looking at high-pressure alloy steel valves and small-sized casings as part of its portfolio expansion.

The company has recorded sales of 31,052 tonnes of steel for the third quarter of the current fiscal against 24,537 tonnes for the corresponding quarter last year. Revenues touched Rs 136 crore for the third quarter compared to Rs 109.5 crore for the corresponding period last year.

Mr Taneja said the revenues had taken a dip as the company had a `large fixed power contract' with the Oil and Natural Gas Corporation (ONGC) of $35 million. The loss in revenues touched Rs 15 crore for 2003-04, which is due to fixed dollar rate. He added that the company was estimating to touch 70,000 tonnes and is projecting a turnover of Rs 525 crore.

Mr Taneja said the company holds a monopoly status in the manufacture of more than three-inch diameter tubes, bearing tubes and other products. It is also a supplier to Defence establishments such as the Nuclear Fuel Corporation and a bulk of its products is taken up by ONGC.

Commenting on the performance of Indian Seamless Steel and Alloys Ltd, Mr O.P. Kakkar, Vice-Chairman and Managing Director, said the company's sales had touched 53,703 tonnes for the third quarter ended December 2003 against 42,198 tonnes for the corresponding period last year. Revenues touched Rs 145.6 crore (Rs 101.2 crore).

For the nine-month ended December 2003, sales touched 1,42,566 tonnes (1,25,046 tonnes) and revenues stood at Rs 387.5 crore (Rs 293.9 crore), respectively.

He said that currently the company supplies about 55 per cent of its production to Indian Seamless whose tube-making capacity has increased by one-lakh tonne per annum with the merger of Kalyani Seamless Tubes Ltd.

Indian Seamless Steel is estimating to cross its capacity by two lakh tonnes for the current fiscal year. The target for the next three years would be to touch three lakh tonnes per year.