Chandigarh-based Steel Strips on expansion spree

In order to cater to the unprecedented demand for automotive wheels, Chandigarh-based Steel Strips Wheels Ltd (listed on BSE, NSE) is planning to set up its fourth greenfield manufacturing unit in Pune with an investment of Rs 200 crore and having an installed capacity of 250,000 wheels per annum. The company has also plans to ramp up its capacity at its existing plants with a capital expenditure of Rs 120-130 crore. As far as the funding is concerned, it would be through private equity placements, external commercial borrowings, internal accruals, term loans etc.

With the new facility and slew of expansion likely to completed by December 2011, the company claims that it would be Asia’s largest automotive wheel manufacturer by next year.

At present the company has three manufacturing facilities namely at Dappar (Punjab), Chennai and Jamshedpur. The company has installed capacity of 11 million wheels per annum and has plans to increase the manufacturing capacity to 19 million wheels per annum by 2011 and further to 21.5 million wheels by 2012-13. Its product range comprises wheels for passenger cars, multi utility vehicles, tractors, trucks, OTR vehicles as well as two and three wheelers.

Speaking to Business Standard, senior officials of the company said, “ We have plans to set up new unit in Pune, with an installed capacity of 2.5 million wheels per annum, which can be expandable to 5 million wheels per annum. The new unit would attract an investment of Rs 200 crore. The ground breaking ceremony of the plant would be done in November 2010.”

The company also plans to ramp up the capacity of the existing plants. By 2011, the production capacity of the Dappar (Punjab)would be 8.5 million per annum, Jamshedpur 2 million and Chennai would be 6 million per annum. At present the production capacities of these units are 7.5 million, 1 million and 2.5 million per annum respectively.