Usha Martin Ltd has taken up a project to make 3 lakh tonnes a year of special auto-grade items for Toyota Group of Japan, at its Jamshedpur steel-making facility.
Prashant Jhawar, Chairman of the company, told reporters here on Tuesday that the special bar and rod products were being developed in collaboration with Aichi Steel Corporation, a Toyota Group outfit.
No extra investment
He said manufacturing of these parts was expected to start in 2015-16. Jhawar said the tie-up with Toyota also involved off-take arrangements.
These steel items are used to make automotive components such as crankshafts, pinions and steering rods.
Jhawar explained that part of the one-million-tonne capacity at the company’s Jamshedpur unit would be utilised for the project. “This will not entail any significant additional investment”, Jhawar said.
Usha Martin expects to commission its second-phase iron ore beneficiation plant, a pellet unit, coke oven and 35 MW captive power unit by October.
“The fourth quarter will likely see benefits from commissioning these units and increase the profitability”, Jhawar added.
During Q1 of FY14, Usha Martin reported a profit before tax of Rs 4.02 crore (Rs 17.14-crore loss in year-ago period) . “EBITDA margin during the quarter stood at Rs 19.7 per cent and we hope to achieve 3 to 4 percentage points of additional margin in the fourth quarter,” said Rajeev Jhawar, MD of the company. The Q1 net was Rs 2.20 crore (net loss of Rs 10.86 crore).