Shyam Metalics and Energy Ltd (SMEL) is looking to undertake an all-round boost in the production capacity of pellets, sponge iron, billet, and finished steel at an estimated investment of ₹3,900 crore.
It is also looking to increase the integrated steel production capacity from the existing 8.85 million tonne (mt) per annum to 14.45 mt of which value-added long steel capacity will be enhanced to 2 mt from the present 1.47 mt.
According to Brij Bhushan Agarwal, Vice Chairman and MD, SMEL, the company will be investing more in the B2C market on the finished steel side and this segment will contribute towards a majority of its revenue growth. The company has already invested close to ₹2,400 crore out of the ₹3,950 crore existing capex plan in the last two years.
More facilities
“We are adding around 1 mt iron making capacity, 0.5 mt of coke oven capacity and 0.5 mt of long product facilities apart from 2.4 mt palletisation plant of which 1.2 mt would be in West Bengal and 1.2 mt in Odisha,” Agarwal told businessline.
Post expansion, the pellet capacity will go up to 6 mt from the current 3.6 mt; sponge capacity will increase to 2.9 mt (2.10 mt); billet capacity to 2 mt (1.47 mt) and finished steel capacity would go up to 2 mt (1.47 mt).
SMEL is also one of the largest producers of coal-fired sponge iron in the country with a present capacity of 2.1 mt. Post the planned expansion, the capacity will go up to 3 mt of iron making. The new investment will also help the company bet big on its exports and expand its geographies to newer markets. Exports currently account for nearly 16 per cent of its total business.
“India will play a dominant role in supplying ferroalloy and steel to the world. Though the geopolitical situation is slightly challenging at present, this is not likely to persist for too long. We expect good growth in exports,” Agarwal said.
SMEL, which produces speciality alloys and ferro products, recently commissioned a very specialised 14,000 TPA low carbon ferro chrome plant thereby adding to its diversified product basket.
The company has a very large basket of metal products including pellets, sponge iron, billets, TMT Rods, wire rods, angles, channels, beams, ferro chrome, ferro silicon, silico manganese, and aluminium foil products. It recently concluded the acquisition of Mittal Corp Ltd to strengthen the metal portfolio by entering the stainless steel/wire rod and bar mill.