With steel makers looking at ways of reducing the cost of production, Electrotherm India Ltd (EIL), a leading technology solution provider in foundry and steel industry, is hopeful of supplying at least 25 medium frequency induction melting furnace for steel melting application within this year, after it successfully commissioned the first 40 tonne furnace to a Nagpur based client last month that is expected to bring down cost of production by Rs 800-900 per tonne.
EIL's engineering and projects division(E&P) has successfully commissioned the world's largest medium frequency induction melting furnace for supplying steel billet to Mahalaxmi TMT Private Ltd.
The 40 tonne furnace with capacity of production of around 1.6 lakh tonnes per annum has commenced commercial production already.
EIL's joint managing director Avinash Bhandari said,"The 40 tonne medium frequency induction melting furnace is more efficient vis-a-vis the traditional blast furnaces, and save the cost of production up to Rs 800-900 per tonne. We are expecting to supply at least 25 such furnaces this year with steel makers now keen on reducing the cost of production."
He added that of the net 60 million tonne installed steel capacity in the country, nearly 25 million tonnes come from induction furnaces and remaining are blast furnaces that are suited for large-scale production. EIL's customers are mini and micro steel plants. It currently has over 2650 installations in the country and around 260 installations overseas.
The company is aiming to grow the revenues from its E&P division to Rs 350 crore in 2010-11 from Rs 210 crore in 2009-10.
"This 40tonne induction furnace is a new product that is not available with our competitors, and could definitely impact the division profitability in a positive manner.", Bhandari said without indicating further details. The E&P division currently has an order book of Rs 80 to 100 crore.
While the division's exports have risen from 5 per cent of its turnover in 2003-04 to around 57 per cent of the turnover in 2008-09, EIL is cautious about exports this fiscal, as prices of steel are yet to pick up in countries like Iran,Turkey and the West Asian countries.
"India and China are recovering from the dip in prices that were down as much as 25 per cent in 2009-10. Prices have gone up by 15-20 per cent in the last few weeks", Bhandari said.
He added that “In spite of average 25 per cent lower price realisation during 2009-10 compared to last year, we have increased our turnover. This shows the demand of our products in niche markets that we serve."
EIL's group turnover crossed Rs 2000 crore in 2009-10 from Rs 1700 crore the year before. It is eying to double its turnover to Rs 4000 crore by 2012.
EIL's core business areas comprise the engineering and projects division, steel and pipe division, electric vehicles division and power division.