Mahindra Auto Steel’s (MASL) first automotive steel processing centre set-up at Chakan is the latest addition to Mahindra Intertrade’s service centre network. Harsh Kumar, Managing Director, Mahindra Intertrade Ltd, describes the new joint venture initiative and future plans.
Could you elaborate on the new partnership in Mahindra Auto Steel?
Mahindra Auto Steel is a joint venture (JV) with China Steel Global Trading Corporation, Taiwan and Mitsui & Co (Asia Pacific) Pte Ltd, Singapore. While Mahindra Intertrade holds a share of 51 per cent in the JV, the other two partners hold 24.5 per cent each. Each partner contributes a value proposition. Mahindra has wider presence in India, while Mitsui has a global presence in the steel processing business with over 70 such service centres spread across the world. Similarly, China Steel is one of the largest steel manufacturers in the world. So each one of the partners brings its own strength to this JV. Mitsui brings with the customer connect, China Steel produces the highest grade steel in the world and supplies to auto OEMs all over the world. So they contribute international connections through this JV. We believe that we will be able to leverage these international connections to be able to develop the business model of the company and this is the aim of
What prompted to to set up the new facility at Chakan?
We wanted to be in the automobile belt and we are based in the western region with our facilities in Mumbai and Pune. Our first such facility was started in Nashik way back in 2007. When we created such a business model there was no such independent merchant producer of blanks and profiles. We are free to source steel from any company and sell the processed steel blanks to any auto OEM.
Who are your major customers?
Strategically our goal is 50 per cent business shall be Mahindra-centric and the remaining 50 per cent outside Mahindra. At Chakan, MVML has a huge facility and MASL will cater to its steel requirement. Other than Mahindra, we are open to any auto OEM located close to our facility who wish to source processed steel from us.
What is the installed capacity of this plant? When are you planning to achieve this?
The installed capacity is 100,000 tonne in phase 1 while another 30,000-40,000 can be added in the phase 2 and a mirror image of the whole at a later stage. Currently we are on a trial basis and reaching full capacity will take time as the approval process will take 6-12 months. Every stock keeping unit has separate approval process so that it is a long process.
What are your expectations from the industry?
We have set up a big facility, so naturally our expectation is high and we are bullish on the industry growth in future. The market has already hit the rock bottom and now it will only be ascending and we are here at the right time.
There are other auto hubs in Chennai, Sanand and NCR. What are your plans to cater to these regions?
These are all matters of feasibility and we need to discuss with our partners and customers. So it will take some time to take a decision but you can be sure that we will be everywhere. We cannot supply from here to those regions, so we have to be in the auto hub.
What are your future plans?
We will create a mirror image of the current facility sooner to make it almost 300,000 tonne facility. We are waiting for the GST to be announced.