The Hindu Business Line : ISMT plans to expand production capacity

FUTURE PLANS: Mr B.R. Taneja (right), Chief Executive Officer, ISMT Ltd, and Mr O.P. Kakar, Managing Director, at a press conference in Mumbai on Wednesday. - Shashi Ashiwal

Mumbai , March 22

ISMT Ltd, which makes specialty steel and specialised seamless tubes, has decided to expand production capacity.

While the enhanced capacity in alloy steel would be in a modular fashion at marginal cost, the additional capacity in seamless tubes including a new finishing mill at Baramati would cost Rs 250 crore.

The required investment would be met mostly from internal accruals, Mr B.R. Taneja, CEO, said at a press briefing here today.

The increase in manufacturing capacity would be from 1,55,000 tonnes per annum (tpa) to 4,75,000 tpa in specialised seamless tubes and from 2,50,000 tpa to 5,00,000 tpa in alloy steel. The new finishing mill would be of 4,05,000 tpa capacity.

The company "would emerge as one of the largest players in the specialised tube segment in the world with a production capacity of 4,75,000 and 5,00,000 tonnes of seamless tubes and alloy steel respectively. The turnover should go up from the current year level of Rs 1,100 crore to Rs 2,900 crore soon enough," a related official statement said.

The additional capacity in seamless tubes would be completed by February 2008, that in alloy steel, over the next 2-3 years.

The decision to enhance production capacity was attributed to high growth rate in the user industries of specialised seamless tubes, including the power sector. According to Mr Taneja, there has been satisfactory progress on the company's proposed joint venture with Boulder Steel and Breitenfeld Group in Australia.

ISMT would take an equity stake of 35 per cent or more in the $300-million project (equity component of $ 120 million) and also be the technology supplier.

The JV would make steel and seamless tubes.