SMS Meer gets Rs 100 cr India Seamless contract

Pune-based integrated specialised seamless tubes and specialty steel manufacturer ISMT has commenced the implementation of its Rs 250 crore expansion project.

It has placed an order for basic PQF Mill on SMS Meer of Germany at a cost of Euro 18 million (Rs 100 crore) and the equipment would be delivered between 12-15 months.

The company is also upgrading its tube making facilities at Ahmednagar from the present 60,000 TPA to 75,000 TPA.

The Ahmednagar & Baramati plants, would thus have an installed capacity of 475,000 TPA.

The delivery period has been compressed to 12-14 months enabling the mill to be commissioned by December, 2007.

Thus, the last quarter of 2007-08 will also have production coming from the new mill and, accordingly, will make a difference to the top-line as well as the bottom-line of the company, said Rajiv Goel, chief financial officer.

Simultaneously, ISMT is also expanding alloy steel production from the present 250,000 tonne per annum (tpa) to 500,000 tpa in the next two to three years, complementing its increased requirement of steel for tube making.

"Apart from increase in capacity, the project will also reduce cost in terms of material usage and process costs. The new capacity is geared to cater to fast growing market segments of power generating equipment, construction equipment, oil exploration, apart from consolidating the company's position in automobile, bearing and other specialised segments," added Goel.

The above cost reduction together with the volume growth are expected to improve ISMT's operating margins from the present 24 per cent. Implementation of this project will place the company among the front ranking global specialised seamless tube producers with a gross turnover of over USD 1 Billion "� Rs 4, 500 crore.