The Hindu Business Line : Steel Strips to study feasibility of wheel rim plant in Morocco

Chennai, Nov. 12 Steel Strips Wheels Ltd, which has bagged an order to supply the full requirement of wheel rims for French car-maker Renault’s greenfield plant in Morocco, will study the feasibility of setting up a plant in the North African country, according to reliable sources.

The company hopes to begin the feasibility study some time next year and if it decides to go ahead with the Morocco plant, begin the construction in early 2013. The company anticipates an investment of €20 million (about Rs 140 crore) in the Morocco plant.

In an announcement to the stock exchanges on Thursday, the Chandigarh-headquartered Steel Strips Wheels said that Renault had nominated it for 100 per cent supply of steel wheel rims to its greenfield plant in Morocco. Steel Strips Wheels would start supplying for this project from the last quarter of 2011 from its Chennai plant.

The company expects to supply more than three million wheel rims in five years to Renault, which would lead to foreign exchange earnings of about €28 million (Rs 200 crore).

When contacted, Mr Dheeraj Garg, Managing Director, Steel Strips Wheels, told Business Line over the telephone that the company had expanded its relationship with Renault ever since it started supplying wheel rims for the Logan in India. It had been nominated to supply to Renault in Romania and Brazil.

In an announcement on Tuesday, the company informed the stock exchanges that it had received an open export order from Renault for supplying about 1.80 lakh steel wheel rims a year, valued at about Rs 8 crore.

The company’s plant in Jamshedpur, with a capacity of one million wheel rims for trucks, would begin production in April, Mr Garg said.

Its Chennai plant, with a capacity of three million rims a year, would shortly reach full capacity. The plant in Punjab had a capacity of 7.5 million wheel rims a year.

Steel Strips Wheels reported a net profit of Rs 4.34 crore on sales of Rs 97 crore for the second-quarter of this financial year.

In 2008-09, it posted a profit of Rs 7.79 crore on sales of Rs 317 crore.

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