On An Expansion Spree - Electrotherm (India) Ltd.

Electrotherm (India) Limited, established in 1984 by Mukesh Bhandari, Chairman & CTO and Shailesh Bhandari, Managing Director, is today India’s largest manufacturer of induction melting furnace and refining equipment. On a yearly basis, more than 18 million tonnes of steel is produced on equipment supplied by Electrotherm. The company has taken rapid strides over the last six years and its total sales have increased from Rs 30 crore in March 2003 to about Rs 1,700 crore in March 2009, growing at a CAGR of 90-plus per cent. The company has transformed itself successfully from a pure B-to-B organisation to a B-to-B and B-to-C entity with the introduction of industrial products for the retail segments.

Electrotherm comprises three divisions: engineering & projects, special steels & pipes, and automotive. The Engineering and Project Division has grown through expansion and diversification. Over the last six years this business has been focusing on providing turnkey solutions for steel making in the world market through various steel making routes, including arc and induction. The company is a market leader in India in the induction furnace market for steel making with more than 50 per cent market share in large-size induction furnaces.

The company has recently developed and dispatched the world’s largest induction furnace of 40 tonnes for melting application. This furnace with its new design is expected to bring the manufacturing cost of steel through the induction route lower and thus will have a huge impact on the way steel is produced in India using this method. The induction furnace products are sold in 27 countries around the world, including Iran, Sri Lanka, the Middle East countries, Pakistan, Bangladesh, Kenya, Tanzania, Ghana, Greece, Nigeria, Zimbabwe, Turkey, Senegal, Ethiopia, South Africa etc.
The company has completed its first turnkey project for making DRIs through the gas route using HYL technology at Abu Dhabi. This plant, with a capacity of 0.2 MTPA, is ready for commissioning. With the overall steel market sentiments now improving, the company expects to book larger orders for its Engineering & Project Division in the year FY2010-11 and execute huge turnkey projects outside India. Transformer manufacturing has been added as a new product line in the recent past to this division. With a focus on the growing power sector, the company has further added products like static VAR compensators and dynamic power factor compensation systems.

The company is looking to make a small investment in acquiring capacities for TLT manufacturing and setting up new manufacturing facilities for transformers. The Steel Division of the company has set up a world-class fully integrated manufacturing facility at Kutch. The plant produces niche/value-added products, including PG-approved angles/structures for transmission line towers and wind mill applications, stainless steel for industrial application and mild steel and carbon steel for structural/special applications. The company has also added galvanizing and fabrication facilities for transmission line towers in this division.[PAGE BREAK]

TMT and CRS TMT bars marketed under the brand name ‘Electro TMT Plus’ are the most preferred TMT bars in Gujarat and have slowly started replacing the products of primary producers like TATA and SAIL in the Gujarat market. The company expects its overall margins in the Steel Division to improve going forward on account of change in the product mix due to increased pipe production in FY 2010-11 and the CPP becoming fully operational. The company is expanding its distribution network within Gujarat for TMT sales and within India for DI pipe sales. The company has recently started eight regional offices to focus on sales of DI pipes across various states within India.The company has emerged as a strong player in the highly monopolized ductile iron pipe business with the setting up of 0.2 million TPA capacity at Kutch. The company has completed its investment in pipe plant capacity expansion recently and expects to generate substantial sales out of DI pipes in FY 2010-11. Meanwhile, with the raw material prices becoming extremely volatile, the company is focusing on hedging its risks. With steel operations on the increase, Electrotherm is now exploring the world market for sourcing the right quality of raw material and keeping the prices under check. It is also seriously considering the possibility of acquiring captive mines for ore and coking coal.
The Electric Auto Division of the company is India’s largest manufacturer of electric two-wheelers and markets these under the brand name ‘YoBykes’. The company has been honoured with the prestigious ‘Overdrive Automotive Product Of The year Award’ in 2007.