Ispat eyeing US car market for exporting HR products

Ispat Industries Limited is planning to market its newly developed 1.2 mm and 1.6 mm hot rolled coil to the carmakers of the US after completing second phase of their HR capacity expansion programme by April-May this year.

"We have already done a survey in the US and found that HR products of lower gauge had very good demand in that country and we are targeting a nominal share of that market," IIL director in-charge Vinod Garg said.

He said by pushing HR lines for CR lines there will be considerable direct saving to the tune of $40 per tonne in conversion cost that would be of mutual benefit.

"As of now, we are not planning anything big for our cold rolled product lines. There is nothing in pipeline for going beyond HR. It is better to go for HR lines considering our existing quality and capacity," Garg said.

HR sheets were not being presently used by domestic carmakers and they were mainly using cold rolled sheets and also importing automotive sheets currently, he said.

"We expect that five-six years down the line, Indian automobile manufacturers will also go for HR products instead of CR galvanising as quality of HR sheets is fast improving and there will be considerable savings in cost as well," Garg said.

Implementation of Phase II of IIL's HR project involved an additional capacity of 1.5 million tonne per annum ramping up its installed capacity to 3.0 million tonne p.a.

To a query, Garg said the company had no plans to increase capacity at their cold rolling and coating complex at Kalmeshwar.

"We are just exploring to produce more from Kalmeshwar within existing capacity of 3 lakh tonne against 2.48 lakh million tonne produced in 2001-02 and expect to achieve that target."

Of the 3 lakh tonne planned for this year from Kalmeshwar, the company will sell CR to the tune of 15000-20000 tonne and the balance will be galvanished steel sheet and PVC coated steel, he said.

Coming back to HR, IIL Director said considering the demand and price situation, they were targeting to produce 1.26 million tonne of HR products this year as against 0.87 million tonne in 2001-02.

"Fifty per cent of 1.26 m ton would be exported and the balance would be sold in domestic market. Of the 50 per cent, share of galvanished sheet and colour coated steel would be about 3lakh tonne, while other products would account for another about 2 lakh tonne of export," he said.