The Hindu Business Line : Surya Roshni in expansion mode

The economic slowdown has not deterred Surya Roshni Ltd from incurring an additional capital expenditure of Rs 500 crore to step up capacity and add new products in its steel tubes and pipes and lighting divisions.

The company anticipates the investments to add Rs 1,500 crore to its topline next calendar year.

The steel and lighting divisions together had a turnover of Rs 1,800 during 2008-09 and it is projected to cross Rs 2,000 crore during the current fiscal. Of this, Rs 300 crore would account for exports.

Bhuj plant

Surya Roshni will be setting up a spiral pipes manufacturing facility in Bhuj at a cost of Rs 400 crore for an annual capacity of two lakh tonnes, while it will invest Rs 100 crore on a new plant in Madhya Pradesh. The new unit will produce high mast and pole lamps.

Disclosing this at a press conference, Mr Arvind Bansal, Director (Operations & Corporate Management), said that though the global recession affected its steel and tubes exports with the main markets of the US and Europe grappling with demand recession, the company was optimistic that the recent resurrection measures adopted by them would help it recover its ground.

The company was also exploring new markets in Canada and some of the Asian countries to derisk its exports business in the long run.

Optimistic outlook

Mr Bansal said with steel prices showing signs of stability, the tubes and pipes market is expected to register a steady growth. He said Surya Roshni has maintained its market leadership of 20 per cent, double the average industry growth level of 10 to 12 per cent. The steel tubes and pipes market is worth Rs 12,000 to 15,000 crore, which also includes 30 per cent sales by the unbranded segment selling poor quality products, Mr Bansal said.

The company has launched a campaign to counter the spurious products market to highlight the virtues of quality products.

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