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Shyam Metalics and Energy Ltd is looking to ramp up its capacity to boost profitability.
The company has earmarked a total capex of ₹2,960 crore over the next two-to-three years to scale up its integrated production capacities of steel and ferro alloys to 11.54 million tonne per annum (mtpa) from the existing 5.71 mtpa.
It also plans to add an additional 130 MW captive power capacity. The expansion plan includes its foray into production of aluminium foils involving metal rolling expertise.
Steady growth in sales
According to Sanjay Agarwal, Joint Managing Director, Shyam Metalics, nearly 75 per cent of the expansion would be complete by FY23 and the remaining 25 per cent is expected to be implemented by FY25.
There has been a steady growth in sale of long steel products from around 1.07 lakh tonnes in FY17 to 6.37 lakh tonnes in FY21. This is further expected to increase to 20 lakh tonnes after the proposed expansion comes on stream.
“The total capex cost would be aggregating to ₹2,960 crore of which we have already spent ₹736 crore during the last fiscal. We further plan to invest around ₹850 crore during the current fiscal and another ₹800-900 crore in the next fiscal. Majority of the capex would be through internal accruals,” Agarwal told newspersons at a press conference here on Monday.
The company recently signed up actor Salman Khan as its brand ambassador for endorsing the long steel products.
Shyam Metalics currently operates three manufacturing plants that are located at Sambalpur in Odisha, and Jamuria and Mangalpur in West Bengal. The plants of Sambalpur and Jamuria are equipped with their own captive railway sidings, captive power plants with waste heat recovery boilers and captive water reservoirs.
Plans to recruit more
As a part of its expansion plans, the company is planning to recruit new dealers and distributors across India.
“We are now ready to grow both organically through a combination of increase in capacities in both upstream and downstream business, and diversify our product portfolio by also getting into aluminum foils. We have planned to implement pig iron capacities as backward integration to feed and meet our SMS plant requirements and also meet the needs of DI pipes,” he said.
The company is in the process of setting up an aluminium foil rolling mill complex at Pakuria, about 40 km from Kolkata.
It will have an annual rolling capacity of 40,000 tonne per annum with a product mix to cater to the requirement of the market related to pharmaceuticals, household foil, FMCG, electronics, automotive, dairy and confectionery, among others.