Steelcast Ltd, which has entered into a technical-cum-marketing alliance with the US-based Michigan Steel, is investing nearly Rs 70 crore on expansion of its steel casting manufacturing plant's capacity to tap the multi-billion dollar American railways' demand for castings.

Steelcast, the Gujarat-based steel casting manufacturer that is focused on the mining and construction equipment market, would expand its capacity to 36,000 tonnes per annum (tpa) in two years from the existing 17,000 tonnes per annum tpa, Mr Chetan Tamboli, Chairman and Managing Director, said here.

The BSE-listed company's capacity has already been expanded to 24,000 tpa with an investment of Rs 24 crore in the last one year. Another Rs 45 crore is being invested in 2012-13 to increase it to 36,000 tpa, he said.

The expansion is being carried out in the wake of Steelcast's 50:50 joint venture (JV) with Michigan Steel signed in June 2010, which was announced here on Thursday. As part of the last lap of getting certified by the US Railways, an inspection team will visit the Steelcast manufacturing facility at Bhavnagar in February. “Once approval from the US Railways and the Association of American Railways (AAR) is received in a couple of months, Steelcast will become only the second such company from India.”

The JV, known as Steelcast LLC, has the potential to generate Rs 200 crore revenues over the next five years from the US Railways' demand, including Rs 40 crore in 2012-13. It will market the company's products in the US, especially to the US Railways, for freight transport. Michigan Steel would provide the technology to Steelcast, besides offering assistance such as seeking the requisite approvals in America, Mr Tamboli said.

The US Railways certification is also expected to give Steelcast an advantage over other players while bidding for contracts from the Indian Railways, especially the opportunities expected to be generated from the upcoming Delhi-Mumbai freight corridor.