|New Delhi: Surya Roshni group company, Surya Global Steel Tubes (SGST), said it will invest Rs 400 crore to set up a greenfield steel pipe manufacturing plant in Bhuj, Gujarat.|
"We will invest Rs 400 crore for the Gujarat plant. We have already bought the land and orders have been placed for the machinery," Surya Roshni Chairman and Managing Director Jaiprakash Agarwal told reporters here.
He said setting up of the new plant is part of the company's strategy to cater to demand steel pipes in the oil and gas sector. The plant will have an initial capacity of two lakh metric tonnes and is expected to be commissioned by December next year, he added.
"We are targetting a sales of Rs 2,000 crore in the first year of operations of the plant. The company will export 80 per cent of the production, while the rest will be for the domestic markets," Agarwal said.
The company will fund the investment through internal accruals and debt.
SGST currently has a steel pipe and tubes manufacturing unit at Bahadurgarh in Haryana with an annual capacity of three lakh metric tonnes and accounts for sales of about Rs 1,000 crore.
Asked about the impact of the global downturn, Agarwal said, "New orders have completely stopped. We are carrying out the old orders. There might be a shrinkage of 80 per cent in orders because of the slowdown."