Steelcast Ltd, a Gujarat-based steel castings manufacturer, will invest nearly Rs 107 crore on expanding and upgrading capacities.
This investment is due to the surge in demand coming from the domestic as well as global markets.
With nearly 45 per cent of its sales coming from exports, mainly to the US and Europe, Steelcast is expecting strong growth, Mr Chetan Tamboli, Chairman and Managing Director, said here on Thursday.
A major part of the investments, Rs 65 crore, will be used in expanding production facilities at the Bhavnagar plant.
It will be used to increase steel castings manufacturing capacity from the existing 24,000 to 30,000 tonnes a year in 2012-13 and then to 38,000 tonnes a year in 2013-14.
The BSE-listed Steelcast will also spend about Rs 25 crore on machining activities, Rs 10 crore on equipment for energy conservation and Rs 6.5 crore on environment and pollution control measures, he said.
Funding
Mr Tamboli said the entire investment of Rs 107 crore will be funded through long-term debt, internal cash accruals and advances from customers.
“With the new capacities being set up, our aim is to double the company's turnover in the next three years,” he said, adding that the company's order books are generally full for the coming seven-eight months.
Revenues
The company is expected to post revenues of over Rs 225 crore in 2011-12.
In March, Steelcast had announced a long-term agreement with the $60-billion Caterpillar Inc to set up a dedicated facility to manufacture steel casting products with specifications given by the US major for the assured off-take capability.
Interest-free loan
Caterpillar had also advanced an interest-free loan of $5 million (Rs 25 crore) to Steelcast, repayable over the next four years.
This was expected to increase Steelcast sales to Caterpillar to Rs 150 crore a year by 2015.