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Chennai-headquartered Sumangala Steel (P) Ltd, a 35-year-old steel manufacturer, is embarking on a multi-pronged expansion, including ₹50 crore investments in new units, in preparation for the future growth trajectory.
Starting with a modest capacity of 12,000 tpa (tonnes per annum) in 1987, the company, a manufacturer of billets and TMT bars, has more than 2 lakh tonnes of capacity today.
“Timely investments and single-minded focus on quality and unmatched attention to detail have helped Sumangala grow amid challenges. We can convert any steel scrap into a TMT bar at the lowest cost as we have understood the science in steel making over these years,” said Rajendran Sabanayagam, Chairman & Managing Director of Sumangala Steel.
He said the company had built the capacity and capabilities to take advantage of the emerging steel demand, driven by infrastructure development and the housing segment. Its current capacity of 2 lakh tonnes at its Puducherry factory is expected to cover the demand for the next two years. The current capacity utilization is around 70-75 per cent. With over 600 employees, Sumangala Steel produces various grades of TMT across all sizes from 8mm to 32mm.
With a favourable demand outlook and adequate capacity, the company expects its revenue to touch ₹1,000 crore by the end of this fiscal, up from ₹679 crore. During the first half of this fiscal, it clocked a revenue of about ₹450 crore.
Expansion activities
Meanwhile, the company has undertaken expansion activities to take advantage of the emerging demand. It is setting up a modern scrap shredder at the Puducherry steel mill complex with ₹25 crore investment to process end-of-life vehicles, white goods and light scrap. This is expected to be ready by the end of next year. “The steel scrap that will come out of this process will be used as a raw material to make secondary steel products,” said Sabanayagam.
Sumangala Steel is also establishing ₹15 crore TMT finishing infrastructure to deliver blue steel to be ready by the next year.
The company has also set up a facility with imported equipment from Italy for readymade steel. In this, the steel is pre-fabricated for bending and bundling and sent to the project site needing those specific products. “As all processes are automated, the company can make thousands of rings every day. To execute this, we have also created an engineering team as the work has to be done based on architectural and structural drawings,” said Ashwin Sabanayagam, President & Director of Sumangala Steel.
Though readymade steel has not taken off in a big way in India like readymade concrete, the company expects the demand to emerge in the coming years. With its engineering expertise and manufacturing capabilities, it hopes to be ahead of others in meeting the demand.
The expansion plans are expected to help the company achieve better margins and reach ₹1,500 crore turnover in the next two years.
With intense competition, the company is to launch brand and marketing campaigns to stay ahead, and roped in film actor Arvind Swamy as brand ambassador.
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