Suraj Stainless to set up Rs 70cr plant

In a bid to leverage the increased demand of stainless steel pipes and tubes, Ahmedabad-based Suraj Stainless Ltd plans to set up a new seamless steel pipes and tubes manufacturing plant, the company's fourth, at Kadi near Mehsana in Gujarat.

The company, engaged in manufacturing of stainless steel pipes and tubes as well as welded pipes, intends to invest around Rs 70 crore for the proposed plant, which will ensure its place in the top 10 stainless steel seamless pipes and tubes companies in the world, claim company officials.

The existing three plants have stainless steel pipes and tubes manufacturing capacity of 12,000 tonnes per annum (tpa). Also, these plants produce 8,000 tpa of welded pipes. The greenfield facility is aimed at expanding the existing production capacity of seamless pipes and tubes.

"Currently, the company has 20 production lines and we plan to add another 40 lines as part of the new plant, which will scale up the production capacity for seamless pipes and tubes to 26,000 tpa," said Rajesh Pillai, general manager, Suraj Stainless Ltd. The company intends to fund the project through internal accruals and promoter funding.

Seamless steel pipes and tubes find extensive applications in oil and gas projects, refineries and petrochemical complexes. Apart from this, these products are used in power plants, sugar plants and other engineering projects.

The requirement of steel pipes and tubes is huge and the demand is growing rapidly with a host of refinery projects proposed.

Citing example of West Asia, Pillai said refinery projects worth thousands of dollars were coming up in Arab countries. Also, dozens of power projects are under construction in the US. In the domestic market, more and more companies are coming forward with refinery projects.

The Ahmedabad-based export house also has a strong marketing network in all the countries and it would help the company increase its sales.

The total turnover of the company stood at Rs 280 crore in 2007-08.

Suraj Stainless, which is also a Government of India recognised export house, sell its products to India and exports to around 53 countries.

The company is also looking at supplying seamless pipes to sugar companies and plants in Brazil, which is the largest producer of sugar in the world. The industry is seasonal and plants have to keep on changing pipes and tubes.