By IANS,
Chennai : Steel manufacturer Sujana Metal Products Ltd (SMPL) announced Thursday that it would set up two ready-to-use thermo-mechanically treated (TMT) steel products plants in Chennai and Hyderabad.
“It is part of our Rs.16 billion ($381 million) expansion programme. The plants will be set up in Chennai and Hyderabad with each having a capacity of 60,000 tonnes per annum (tpa) at an outlay of Rs.180 million and will be operational in three months,” SMPL director S. Hanumantha Rao told reporters here.
Setting a target of one million tpa finished product capacity by 2010, the Hyderabad-based SMPL is adopting a triple strategy – acquisition, expansion of existing facilities and setting up greenfield units.
SMPL, which has units in Chennai, Hyderabad and Vishakhapatnam, has augmented its production capacity from 290,000 tpa in June 2007 to 728,000 tpa now through acquisitions.
Referring to the company’s two-phased expansion programme, Rao said the idea was to go in for complete backward integration, including owning an iron ore mine in Bellary, Karnataka.
The 180,000 tpa billets plant in Chennai is part of the backward integration plan. SMPL will also expand the existing TMT facility here to 230,000 tpa from the present 140,000 tpa capacity.
The company has recently acquired a 60,000 tpa TMT unit near Chennai.
In Andhra Pradesh, the company will add 120,000 tpa TMT unit either through acquisition or through setting up a greenfield project at Vishakhapatnam while expanding its existing facility in Hyderabad by 60,000 tpa to 285,000 tpa.
The first phase of expansion will involve an outlay of Rs.8 billion to be funded by a mix of equity (Rs.2.3 billion), debt (Rs.4.7 billion) and internal accruals (Rs.1 billion).