In conversation With Sunil Chordia Chairman and Managing Director, Rajratan Global Wire Ltd.
"Strong Demand Momentum Will Remain For The Next 2-3 Years"
Chairman and Managing Director, Rajratan Global Wire Ltd.
Withstanding the negative impact of the pandemic very well with support from its raw material suppliers, Sunil Chordia, Chairman and Managing Director, Rajratan Global Wire Ltd., states that the company is looking forward to increasing its production capacity both in Thailand and India along with debottlenecking its Pithampur plant
How was Rajratan Global Wires affected by the raw material crunch due to a global shortage of shipping containers as well as volatile steel and coke prices? What measures have been taken to mitigate the same?
Our strategy of having a long-term relationship with our raw material suppliers both in India and Thailand since the begin- ning helped us a lot during these critical times. We value the support extended by our suppliers to at times go out of the way and meet our needs. In India a majority of the raw material is sourced locally and therefore there was no major interruption due to global logistics issues. In Thailand we were majorly dependent on Chinese supplies historically, but our team worked hard and was able to develop alternate sources in time, both locally as well as from a few Indian steel manufacturers. Over the last two years of the pandemic and related logistics issues, we did not lose on any production or sales.
How long do you expect the tyre and bead wire demand and high- growth momentum to sustain?
From all our interactions with industry experts, mainly tyre manufacturers, it seems that the strong demand momentum will remain for the next 2-3 years at the minimum. There might be a few minor corrections along the way, but overall there are many factors such as the policy to scrap old vehicles, a push for infrastructure investment, new vehicle norms, increasing individual mobility needs and the cost-competitive advantage of Indian tyres for export, among others, which will help sustain the growth momentum.
What is your earnings’ outlook for the upcoming quarters?
In Q2FY22 we manufactured bead wire to the tune of approxi- mately 12,000 tonnes in India and are currently running at full capacity. For Q3 and Q4 we are expected to run at full capacity utilisation owing to the strong demand from domestic and global markets. By the end of Q4FY22 the incremental capacity of 20,000 TPA in Thailand should come on stream while we will look to keep debottlenecking our Pithampur plant. Our new Chennai plant for an additional 60,000 TPA to be set up up in the next 24-36 months is expected to start commercial production with part capacity within 12-18 months from the day we get our land from the state government and ground-breaking activities, which augurs well for our future growth momentum.