Bhushan Ltd to invest Rs 20 crore in Haryana

Warehouse at Manesar to become operational by April 2007

Bhushan Ltd, one of the largest vertically-integrated steel units in the north is investing Rs 20 crore at Manesar in Haryana. The company has decided to put up a warehouse in an area of 3 acre to cater for the requirements of automobile units in the region.

The vice president (tubes) of the company, DR Ahuja, told Business Standard that automobile majors like Honda, Suzuki and Hero Honda were located close to Manesar, and the new warehouse would meet the immediate requirements of the big units and their ancillaries.

He said there were quick variations in models these days, so having a facility near consumers would help the company to design and supply according to the needs of buyers.

"Earlier, we used to transport cold-roll strips and tubes from Chandigarh, but that is not viable." The new facility will commence operations from April 2006.

Bhushan Ltd has four steel plants in Chandigarh, one in Derabassi (District Patiala), one in Kolkata, and another in Nepal. A state-of-the-art plant is coming up in an area of 2,000 acres at Sambhalpur in Orissa, with an investment of Rs 4,500 crore. Phase-I of this plant will be complete by the year end.

The group was founded by Bharat Bhushan Singal in 1960 at Chandigarh.

Ahuja apprised Business Standard that the automobile sector bought the largest chunk of the firm's production. About 70 per cent of the output of their tube plant was absorbed by auto-component makers, he added.

The group registered a turnover of Rs 2,027 crore in the year 2004-05. Bhushan Ltd exports to about 30 countries and had clocked in an export turnover of Rs 543 crore last year. he added.

Ahuja said the Orissa plant would be their largest unit with an annual capacity of 25,000 tonne.

"Due to foward and backward linkages at Sambalpur, we will get economies of scale. This will make us more competitive with lower costs."

The Sambalpur unit will also have a 100 Mw steam-based power plant that will supply surplus power to the Chandigarh plants through the national power grid.

A wire-rod mill expansion plan and another tube-mill withbigger diameter and thicker guage at Chandigarh were underway for negotiations, said Ahuja. He indicated that price shocks in the steel market had not effect the firm's profitability because of the scale of production.

He added that the company had observed a 15 per cent increase in demand due to a boom in the housing and automobile sectors in the last two years.