APL Apollo aims to raise steel tubes capacity to 2.5 mn tonne by 2020

APL Apollo Tubes Ltd, India's leading ERW steel tubes manufacturer, is aiming to raise the production capacity from present 1.05 million tonnes (mt) to 2.5 mt by 2020 and plans to set up manufacturing facilities in Eastern India and Middle East. "The vision of the company is to increase the capacity to 2.5 mt by 2020 and plans are afoot to look at adding new plants in Eastern India and Middle East," said Sanjay Gupta, chairman, APL Apollo.
 
Demand for steel pipes has been rising gradually at the back on increased household income and infrastructure spending. To tap this growing market, APL Apollo is planning to add additional facilities (brownfield expansion) at its existing plants. For this, the company has placed orders for five lines of HSU tube mill, the delivery of which is expected in the next 11-12 months, to augment its current capacity.
   
Further, the company is planning to build a greenfield plant in East, where it does not have manufacturing facility at present. APL Apollo is currently servicing Eastern India through its Sikandarabad plant. While a reasonable demands exists for the ERW pipes in this region, freight costs from Northern India imply low margins for the products. With the facility in Eastern region, APL Apollo expects to shore up the margins which will benefit the company in the long run.
 
In addition, APL Apollo, one of the major exporters of steel pipes from India, plans to set up a new plant in Middle East to meet the latent demand in Middle East and Africa (MENA) and European countries for ERW pipes. The ME facility would be the production hub for APL Apollo's export requirements.