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Shakhambhari Ispat and Power Limited (SIPL) is one of the leading steel manufacturers in India. In 2019, SIPL acquired SPS Steel Rolling Mills Ltd. through the NCLT process along with the brand Elegant Steel. This has collectively increased the turnover of the group to around Rs 3000 crore. Dipak Kumar Agarwal, CMD, SPL spoke to BE’s Kuntala Sarkar.

Q. What is your industry outlook under the present circumstances?

A. Shakhambhari group is expecting a great opportunity in the next ten years. The steel industry will have an upward performance. For India, a lot of infrastructural development is bound to happen and this will increase the consumption of steel.

Q. What have been the marketing strategy and the growth rate of your company? How is SPS Steel focusing on the export market?

A. The expected turnover for the SPS will be a rise of 200% from Rs 480 crore to approximately Rs 900 crore for the financial year 2019-20. The company aspires to achieve the turnover of Rs 1500 crore in the financial year 2020-21.

Quality being at its core is of paramount importance for SIPL. We have upgraded our systems and production processes with the latest technology and this is going to be an ongoing process. We have laid great emphasis on timely delivery and have also invested significantly in branding and creating product awareness for the end-user. While we are yet to start the exports from SPS Steel, we are exporting to SAARC countries from our other group companies.

Q. Has the extensive acceptance of TMT bars troubled the conventional steel business in India?

A. Over the years, TMT steel bars have achieved the best standard when it comes to concrete reinforcement. The combination of tensile strength and ductility (flexibility) of TMT bars has made it the right choice for construction.  Conventional CTD steel bars were used in India for a long period of time. However, CTD rods suffer from low or no ductility, an inclination to rust and brittleness, all of which threaten the stability of the structure they are used in. TMT rods came as a solution to these problems, while also adding benefits that uplift the stability and durability of any structure they are used in. In India, the use of TMT steel rods became more widespread after their initial use in flyovers, bridges and high-rise buildings.

Q. How has the brand Elegant Steel expanded after SIPL took control of SPS Steel?

A. We have invested heavily in the Elegant Steel brand and the awareness is an all-time high in the eastern India market. Today, the brand is scaling new heights. We have added 200 dealers in just nine months. We have worked extensively to ease the logistics and enhanced our support for post-sales customer services wherein our team of trained civil engineers help and guide the Individual House Builders (IHBs) at the site to build correctly.

Q. How do you look at the quality control?

A. We have undertaken several upgradation and modernisation projects at our plant to meet global standards. Earlier we had inducted a complete backward integration process by which ferro alloys, sponge iron and billets are now produced internally. This has ensured that we produce 100% virgin and highest quality products. We are in discussions with several foreign consultants for latest technological adaptations to enhance our capacities and quality.

Q. How has the nationwide fall of steel prices impacted your company?

A. It has been a tough year led primarily by the fall in steel prices for the industry. However, this has not affected us significantly. We have successfully managed to optimise our production with 100% capacity utilisation. After some significant changes in our management strategy, our profits before taxes in SPS Steel Rolling Mill Ltd. went up from negative Rs 5 crore to an estimated Rs 25 crore by the end of this fiscal year.

Q. The real estate and infrastructural sectors are experiencing a poor growth rate in the country since 2017. How are you coping with this development?

A. Given the government’s emphasis on infrastructural development through smart cities, 'Housing for All' and construction of more highways, there is a demand for TMT bars and we have been supplying our product to governmental undertaking and departments like the National Highway Authority of India (NHAI), West Bengal State Electricity Transmission Company Limited (WBSETCL), West Bengal Public Health Engineering Department (WBPHED) and others. Power and railways are also good buyers. Our product has also been used in building seaports and power plants by various private entities.

Q. What is your investment planning for the upcoming fiscal?

A. We have plans to infuse around Rs 150 crore in our SPS plant, which includes a captive power plant. This will help to augment our capacities to 4LTPA.