Delhi-based steel tube maker APL Apollo Tubes plans Rs 200-cr brownfield expansion

17 April 2015

Delhi-based steel tube maker APL Apollo Tubes is set to expand its manufacturing capacity by 19 per cent this financial year. The company is investing Rs 100 crore to take this from 840,000 tonnes to a yearly million tonnes.

“We are seeing strong demand for steel pipes from the housing, industrial and large infrastructure projects. Our growth projection of 20-25 per cent (annually) will sustain for the next three years, and to meet the demand, we need to expand our capacities,” said Ashok Gupta, managing director.

In 2016-17, it will invest another Rs 100 crore, to increase annual capacity by another 100,000 tonnes. The money will come through internal accrual. “We have enough cash flow for the expansion and will not borrow  at this stage,” Gupta told Business Standard.

Capacity will be expanded at all four factories — in Bengaluru, Hosur (near Bengaluru, in Tamil Nadu), Secunderabad and Murbad (Thane, Maharashtra).

The MD said the company had launched colour-coated pipes, a first in the country, hopeful of wide acceptance by customers in low-cost housing, rail and metro rail projects, and industrial users. “We have started manufacturing around 4,000 tonnes of colour-coated pipes a month and will increase it to 15,000 tonnes per month within two to three years, when it will be at least 20 per cent of our entire production,” Gupta told Business Standard.

Presently, colour-coated pipes are made at Murbad; the aim is to produce these at all its facilities. Such pipes are suitable for use in architectural and structural applications such as roofing, airports, warehouses, expo centres and fire fighting. Apollo is also looking at Odisha to set up a new unit, for catering to demand from the eastern markets. And, at setting up facilities in West Asia. It is currently exploring opportunities in UAE, Oman and Qatar, said Gupta.

The company reported Rs 2,800 crore in sales for 2013-14. It expects 20-25 per cent growth for the year ended March 2015. For the nine month ended December 2014, the revenue was up 22 per cent, to Rs 2,555 crore.