Sujana Metal Products Ltd, a part of the Rs 3000 crore Sujana Group of Companies, today announced ambitious plans to treble the capacity to one million tonnes by 2010 through acquisitions and expansion plans.

SMPL, known for the widest range of mild steel long products, is focusing on both the organic and inorganic routes for the expansion. The endeavour will help the company to emerge as the largest secondary steel company in

India.

The company had a sale of Rs 726.39 crores as at end June 2007(FY). SMPL has targeted to reach a sales level of Rs. 3100 crores by 2010. Also the company plans to enhance its profitability from Rs 22 crores to an estimated Rs 300 crores by 2010.

An investment to the tune of Rs 1600 crore would be made in two phases for the proposed expansion. In the first phase of expansion worth Rs 800 crore, the amount is proposed to be met through the equity from promoters, internal accruals and long term debt.

The company is presently evaluating various options for funding the second phase of another Rs 800 crore.

With the acquisition of three companies to the already existing two, Sujana Metal Product’s takeover tally has increased to five in less than 12 months. Three more companies for acquisition are in the process of evaluation one each at Chennai, Hyderabad and Visakhapatnam.

SMPL plans more acquisitions in the next three years to cater the fastest growing realty and infrastructure markets in South India.

Even by the end of current financial year June 2008, SMPL will have the widest range of mild steel long products amongst all the steel product companies in the country. The company plans to be among the largest steel producers by 2010.

“Our unique model of locating integrated steel production facilities at decentralised locations has created a win-win situation for us and our clients,’’ said Mr Y S Chowdary, Chairman, Sujana Group of Companies. “Our large base of corporate customers has been growing because of increased customer satisfaction. We are known for consistently product quality, reliability, competitive pricing and timely delivery.”

The company commands a premium in the market as compared to its competitors. While the sales are targeted to treble, EBITDA per ton is likely to grow by 4 (four) times.

The growth plans of the SMPL hinge on higher percentage of value added products (entire range of structural steel and ready to use steel), forward integration—ready to use steel and complete backward integration up to the stage of iron ore mining. Through backward integration, the company can control over all stages of the manufacturing and supply chain process.

“Being a principal supplier to construction majors, Sujana Metal Products Ltd is today reckoned as the backbone of the booming realty and infrastructure sectors,” said Mr V S R Murthy, Group Director, Sujana Group.

First to launch ready-to-use steel

Sujana Metal Products today became the first company in India to launch ready-to-use steel products for commercial use. Among the range is ready-to-use TMT for customers in the construction and infrastructure sectors.

“Customised TMT brings immense gains for the construction industry,” said Mr V S R Murthy, Group Director, Sujana Group of Companies. “Such products not only accelerate project work but also eliminate wastage, resulting in huge savings for the realty and infrastructure sectors. Another major gain is that it cuts labour costs.”

Sourced From: Adfactors Public Relations Pvt Ltd

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