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Aarti Steels Limited: Planning to Expand Its Capacity

A leading manufacturer of high carbon steel wire in India with a capacity of 50,000 MTPA, Aarti Steels also manufactures spring steel wires and tyre bead wires for the automotive industry. The company is planning to expand its capacity by putting up a greenfield wire drawing unit with a production capacity of 10,000 MT per month.

Mr. Vinayak Mittal, Director, Aarti Steels Ltd.

In an exclusive interview given to Wire & Cable India, Mr. Vinayak Mittal, Director, Aarti Steels Ltd., talks about his company, product range and manufacturing facilities.

Excerpts:

Wire & Cable India: Could you tell us a little bit about the business journey of your company?

Vinayak Mittal: Aarti Steels is a flagship company of Aarti Group with business interest in producing high carbon steel wires and textile. The company was established in 1979 in Ludhiana and has steadily emerged as one the leading manufacturers of carbon and alloy steel with its state-of-the-art technology plants located in Punjab and Orissa with a capacity of 4,00,000 TPA. It has fully integrated steel manufacturing facilities for building products such as carbon and alloy steel rounds and squares, sponge iron, and power and ferro alloys. The total turnover of the group is around Rs. 2,200 crore.

In 1992, the company put up its steel wire drawing unit in Ludhiana, which later emerged as one of the leading manufacturers of high carbon steel wire in India with a capacity of 50,000 MTPA.

We are planning to expand our capacity by putting up a greenfield wire drawing unit with a production capacity of 10,000 MT per month.

The company also diversified into yarn business under the name of Aarti International Ltd. It has emerged as a global player with an advanced technological status in the spinning industry. Started in 1994, it initially had 28,000 spindles. Today, it has more than 175,000 spindles.

In 1996, the company installed an arc furnace of ABB make having a 35 metric-tonne capacity to produce carbon and alloy steels for the automotive industry. Our state-of-the-art technology together with the installed capacity of 125,000 metric tonnes gave us a huge competitive advantage. The process of steel making involves an electric arc furnace, ladle refining, vacuum degassing, concast with electromagnetic stirring, automatic mould-level controller and closed casting. Also, the centre comes with round and square rolling mills. The company manufactures products such as carbon and alloy steels and special steels in configuration like rounds, square, flats, etc.

It may be mentioned that Aarti Group has emerged as a thriving organization because of its ability to transform itself rapidly to meet the challenges of the highly competitive global economy. The company has thrived also because of its commitment to becoming a supplier of choice. We have set up a modern, technologically efficient and eco-friendly Green Field Integrated steel plant at Ghantikhal (near Cuttack), Odisha. This project includes two 500 TPD sponge iron kilns, a 90-MW captive power plant, an electric arc furnace (40 metric tonnes) with ladle refining, vacuum degassing, a continuous casting machine to produce billets, a 09 and 18 MVA submerged arc furnace to produce ferro alloy, and a 0.5 million MTPA coal-processing unit.

WCI: Could you tell us a little bit about your technical and production capabilities, infrastructure and the key suppliers of your machinery?

VM: We produce steel, sponge iron, ferro alloys and high carbon steel wires along with power. Our capacity for these products is as follows: steel – 0.5 million tonnes; sponge iron – 0.24 million tonnes; ferro alloys – 0.065 million tonnes; coal washing – 1 million tonnes; high carbon steel wires – 0.05 tonnes; and power – 90MW. Our overall capacity utilization last year was around 90 percent.

One of our major products is tyre bead wire. We supply this product to almost all the major auto and cycle tyre manufacturers in India.

Our steel wire drawing unit is equipped with state-of-the-art machinery including a mechanical descaler, electro pickling, straight line PLC wire drawing machines, a gas fired patenting furnace, and a galvanizing furnace with ceramic bath. This machinery ensures good and consistent quality of high carbon steel wires.

In addition, our R&D center is equipped with state-of-the-art equipment like spectrometers (two), Olympus metallurgical microscope with photographic attachments, and Leco image analyzer with automatic inclusion counting and rating. We also have an Olympus zoom stereo microscope with photographic attachment and various analyzers such as Leco carbon sulphur analyzer, Leco nitrogen oxygen analyzer, and Leco hydrogen analyzer. Additionally, the R&D centre has a Magnaflux machine, a tensile testing machine, an Ultrasnoic machine and a metascope.

Our wire-drawing unit is equipped with state-of-the-art wire-drawing machinery procured from overseas and domestic machinery suppliers – all that to achieve higher production and consistent quality.

WCI: What new developments have taken place in your company in the last 2-3 years?

VM: In the last 2-3 years, we have replaced most of our old machines with state-of-the-art new straight-line PLC-controlled high-speed drawing machines to achieve higher production and consistent quality. Though we have achieved higher production of steel wires, we have reduced our overall cost. We are also moving towards an environment friendly production facility by reducing water consumption. Also, we are planning to expand our capacity by putting up a greenfield wire drawing unit with a production capacity of 10,000 MT per month.

WCI: Could you tell us about your product range and the sectors you serve?

VM: At our wire drawing unit, we manufacture various types of high carbon steel wires – uncoated and coated with zinc and bronze. One of our major products is tyre bead wire. We supply this product to almost all the major auto and cycle tyre manufacturers in India. Our other products include high carbon steel wire ungalvanized and galvanized for making springs for various applications, high carbon rolling quality wire for auto control cables/outer of auto cable, HTGS wire and strand for ACSR conductor, music spring steel wire and messenger wire.

WCI: Your company gives a lot of importance to quality. How do you strike a balance between quality and price?

VM: Our company gives a lot of importance to the consistent quality of our products. Our customers prefer to buy our quality steel wire products because they give higher productivity and defect-free/qualitative finished production at their end thus reducing scrap generation and rejection of finished products. We try of control cost by improving our production processes, employing new technology in the production of steel wires and controlling inventory of consumables and finished products.

WCI: What are your key markets and what is your marketing strategy for them? How do you plan to increase your market footprint in the future?

Our wire-drawing unit is equipped with state-of-the-art wire-drawing machinery procured from overseas and domestic machinery suppliers – all that to achieve higher production and consistent quality.

VM: Our major market is the automobile industry, and that is because we manufacture tyre bead wire for auto tyres, SSR/Q wires for auto control cables, spring steel wires for manufacturing various types of springs which are used by the automobile industry. Unfortunately, this industry is currently not in good shape because of Covid-19. We also cater to the mining and infrastructure sectors, as we manufacture rope wire and HTGS wire and strand. We hope that demand will improve in the third and fourth quarters of the current financial year. In future, our focus would be on finding new postures/markets and on adding new products to increase our market share.

WCI: Keeping in mind the impact of the COVID-19 pandemic on industries, what kind of market trends do you foresee in the current FY and the next FY?

VM: A lot of uncertainty has been hovering over the automobile industry in India and abroad due to the COVID-19 pandemic. The coming months are going to be full of challenges – challenges such as shrinking sales and fast evolving consumer preferences. Most of the businesses are facing a downturn trend, and a large uncertainty about the future prevails. Many potential customers are having a tough time, making purchase decisions difficult to transact. The market for four wheelers like new cars, buses and trucks is likely to shrink, as most of the potential customers may not like to buy these costly items. However, the second-hand automobile market can see some growth, as potential customers may like to spend less to avoid public transport. Many businesses have closed because of the cash flow/liquidity problem on the market. The government has given some incentives or loan facilities to MSME. Interest rates have also been reduced to increase demand. We can expect some improvement in demand in the third and fourth quarters of this year, and we hope that this improvement will continue in the next financial year.

Wire & Cable India