The Rs 2,000 crore Electrotherm (India), the Ahmedabad-based firm which makes furnaces for steel and foundry industry, is eyeing business worth Rs 500 crore from mini steel plants in the eastern region, a top official said on Tuesday.

With the eastern states such as West Bengal, Bihar, Chhattisgarh, Orissa and Jharkhand being home to mini steel plants, Electrotherm anticipates demand for its 40 metric tonne induction furnaces.

On the national level, the primary route of using steel scrap as raw material accounts for just 40-45 per cent of steel production.

Electrotherm, run by first-generation entrepreneur Shailesh Bhandari, had recently installed and commissioned 40 metric tonne induction furnaces for two thermo mechanically treated (TMT) steel makers such as Mahalaxmi TMT in Maharashtra.

“The 40 mt induction furnaces cost around Rs 5 crore. But induction furnace makes for just 20-25 per cent cost of the whole set-up that includes steel works and setting up of sheds, etc. Electrotherm also does steel works because we carry our engineering and procurement work for steel plants. In the eastern region, we see potential to sell 20 such induction furnaces and set up units … translating to a potential of Rs 500 crore business,” said A P M Tripathi, regional head (east), Electrotherm.

By using 40 mt induction furnaces, steel billet makers, who use 30 mt furnaces, are expected to reduce cost of production by Rs 800-900 per tonne and this could add cumulative savings of Rs 12-13 crore per year, said company officials.

Electrotherm’s turnover crossed Rs 2,000 crore in 2009-10, registering an almost 18 per cent growth, said Tripathi.

Source: MyDigitalFc