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Manish Basu

Kolkata, May 17 Ramsarup Industries Ltd, the second largest steel wire manufacturer in the country after Tata Steel, is looking at saving an estimated Rs 275 crore a year in raw material costs after merging its group company Lohh Udyog with itself, the company’s CFO, Mr Naveen Gupta, told Business Line.

Lohh Udyog, which is slated to start producing 6.91 lakh tonnes of steel billets annually at its Kharagpur plant from April 2009, will fully meet Ramsarup Industries’ steel wire requirement at its Durgapur and Kalyani steel wire-manufacturing units, he said.

“After the merger, we expect to save Rs 4,000 a tonne as far as steel billets are concerned, which we now source from the open market. This will add to our profit margins,” he said. The Kharagpur unit currently produces only pig iron.

“After the merger, we will be the first in the country to produce steel wires right from the process of mining raw iron ore,” he said. The 8 x 8 inches steel billets to be produced at Kharagpur will also be the longest in the country produced so far, he added.

The company is also expecting to save an additional Rs 200 crore by sourcing power from its new captive power plant at the Kharagpur unit. The steel plant requires 60 MW an hour, of which 20 MW will be obtained from the captive plant. The unit will generate power from gas emitted from blast furnaces and waste heat from the sponge iron unit, Mr Gupta said.

Ramsarup Industries recently obtained the Clean Development Mechanism clearance from the United Nations Frameworks Convention on Climate Change (UNFCC) and is looking at earning Rs 69 crore over seven years by selling carbon credits from its power plant. The company has plans to ramp up annual steel wire production from 2.88 lakh tonnes to 6 lakh tonnes by 2010.

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Ramsarup sees ‘huge savings’ post merger

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