Construction Industry News
Shyam Metalics and Energy expects to generate $1 billion in revenue from its stainless steel business following the acquisition of Mittal Corp through the corporate insolvency resolution process (CIRP).
Brij Bhushan Agarwal, vice chairman and managing director of Shyam Metalics, stated that Mittal Corp Rs would invest 2,000 crore in new products and value addition. He expects to generate $1 billion in revenue over the next five years.
With the acquisition of Mittal Corp., the company enters the specialty steel segment. Mittal Corp's Committee of Creditors (CoC) approved the resolution plan last month, and a letter of intent was issued on behalf of its subsidiary, Shyam Sel and Power. This was subject to confirmation by the National Company Law Tribunal (NCLT). The total cost of acquisition and upgrade is considered to be approximately Rs 450 crore.
Agarwal is betting heavily on stainless steel and anticipates demand from India's railways and infrastructure sectors. "We are also seeing strong demand from the defence sector," he added.
In stainless steel, the emphasis would not be on nickel-intensive products. "We would look at products where the nickel percentage is no more than 2-3%," he said, adding that Shyam Metalics provided the majority of the other key ingredients.
Shyam Metalics' consolidated net sales were Rs 10,393.96 crore in FY22. The company's product portfolio includes pellets, sponge iron, billets and value-added end products such as TMT rods, wire rod and structural.
The product portfolio is expanding as the company prepares to invest rs 10,000 crore in its metal business over the next 5-6 years. Nodular iron, which is used in a wide range of industrial applications, and roof panels for buildings would be important revenue streams in the future.
Shyam Metalics acquired Ramsarup Industries last year, and Agarwal stated that the company would invest about Rs 1,000 crore in capex in the first phase. "We are rebuilding the plant and developing ductile iron, which will be operational in 2025-2026," he explained.
He also said Rs 3,400-4,000 crore revenues were expected from roofing sheets over the next 3-4 years. Of the planned Rs 10,000 crore, about Rs 2,500 crore had already been invested.
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