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In February, India’s Ramsarup Group held the official opening of a new single-line Low Relaxed Prestressed Concrete (LRPC) steel wire plant in Durgapur, India, which is in the northeast section of the country and is considered a primary steel-producing center.?
The company notes it represents the first facility dedicated to production of LRPC wire in the country. The steel wire is to be used for a range of infrastructure projects. It reports that capacity is 30,000 metric tons of wire a year, which increases the group’s overall capacity to 300,000 metric tons (black and galvanized) of wire.
Below, Ramsarup Group Chairman Ashish Jhunjhunwala discusses his outlook for this venture as well as the company with WJI.
WJI: How does your company view this investment given the state of the world economy and that many companies are choosing to focus almost entirely on cutting their costs and investments?
Jhunjhunwala: Our focus is mainly on the domestic markets which is still, if I may say so, “reasonably okay.” India will be spending approximately $500 billion towards infrastructure development in the next five years. This will include major developments of roads, rail tracks, ports, airports, metro rails, mono rails, etc. LRPC strands and single line LRPC has substantial use in all these projects. It is important to note that although India is producing approximately 1.6 million mt per year of wire, production of LRPC wire is hardly 100,000 mt per annum. Hence, we find sufficient space for ourselves, even given the current state of the world economy.
WJI: Do you believe that India’s economy will be better able to withstand the current conditions?
Jhunjhunwala: While I do not believe that the Indian economy is decoupled from the rest of the world, only approximately 17% of India’s GDP is dependent on exports. With massive internal consumption and positive growth in GDP (approximately 5%), India is in a much better position to withstand the current global turmoil.
WJI: Will you be able to
operate your new plant at an efficiency rate that is cost-
effective? To what degree will
its production be for domestic consumption versus exports?
Jhunjhunwala: As mentioned above, our production will be largely dependent on our own consumption, and with expected fairly large expenditure by the Indian government towards infrastructure growth, we will able to run our plant at an efficient capacity. However, we will be not ignoring exports and are making full efforts to get our quality approved in the European Union, including certification of homologation and voluntary mark. We have already had inspection carried out by some of the authorities of the European Union. Moreover, we have also made some shipment to the Middle East and our quality has been approved by them. We want to be ready with all approvals so that once the situation improves in the West, we will able to market our product.
WJI: How do you view your latest investment?
Jhunjhunwala: We are extremely bullish about the long-term prospects of our investment. The Indian story is very much intact due to our world-class facilities, quality product, low cost, wide range of production, customer focused approach and experience in the wire line. We are very confident that the above investment will be very profitable. |
