Anantapur-based Arjas Steel Private Limited is planning to invest over ₹200 crore on expansion of its plant. The company is also looking at adding a Research & Development (R&D) facility.
An integrated special steel producer, Arjas, formerly known as Gerdau Steel India Private Limited, located at Tadipatri will be doubling its production capacity in the coming four years, according to its Managing Director Sridhar Krishnamoorthy.
Installed capacity
Speaking to The Hindu here, Mr. Sridhar said, “We have an installed capacity of three lakh tonnes of special steel per annum, and the current manufacturing facility has reached its full capacity. So, we are looking at investing over ₹200 crore on new equipment and capacity expansion to make it a six lakh tonne unit in four years.”
The required investment would be sourced through internal accruals, he said.
Private equity firm, ADV Partners, had acquired Arjas Steel from the Brazilian entity, Gerdau Steel, in the early part of this year for about $120 million. The present turnover of Arjas is about ₹1,450 crore and the Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margins stand at 15%. “Given the market scenario, we are doing well,” Mr. Sridhar said.
Besides capacity expansion, the company is also planning to set up its own R&D centre to better customise its products to suit the market requirements.
The company has so far been depending on Gerdau to meet its R&D needs.
Tie-ups with IITs
“We are looking at the requirements of electric vehicles, which have lot of applicability and demand in the market. While having a dedicated in-house facility here, we are also tying up with IITs and other premier institutions to meet our R&D requirements,” said Mr. Sridhar.
He meet Chief Minister Y.S. Jagan Mohan Reddy recently and gave him details of the forthcoming investments and expansion plans.
The government has lined up several plans to encourage manufacturing facilities in the Rayalaseema region.
“Anantapur is fast emerging into an auto hub and it speaks of our relevance in terms of creating an ecosystem. Hyundai is already our customer and we are pursuing its sister concern KIA Motors, which has set up its first car making unit in Anantapur,” he said.
