It is reported that the Wheels India Ltd wants to make steel structural components for power plants specially made steel products such as girders, columns and beams that support a boiler. According to Mr Srivats Ram MD of Wheels India, they are planning to invest INR 40 crore in setting up a factory at Deoli near Nagpur. The plant is coming up in the 30 acre plot in Maharashtra Industrial Development Corporation and will be operational in the second half of 2009. Mr Ram told Business Line that initially, the plant will be able to process 1,000 tonnes of steel a month. When it reaches steady-state in three years, its capacity will be four times as much.
He said that “This is a marriage between our inherent welding competence and demand from power sector observing that the new venture would give Wheels India the necessary contra cyclic support. “It will buffer us from the volatility of our automotive market.” He added that an added advantage is that the power sector bears with flexible pricing mechanism for the prime raw material steel, a highly volatile commodity, as was seen in 2008. The current market size of power plant structural components is estimated at INR 4,000 crore and is set to grow in double digits in the next 10 years due to capacity expansion in energy sector under 11th and 12th five-year plans. The 11th Plan target is to add 78,000 MW; and the 12 Plan’s is 82,000 MW or about 16,000 MW annually for the next ten years. A lot of steel will be consumed.
