Laxcon Steel Limited is India’s leading integrated stainless steel manufacturer over 40 years with 4 manufacturing facilities across India. The company is offering diversity in special steel products by achieving right balance of processes and technology. Gopal Gupta, Managing Director of Laxcon Steel Limited (LSL) shared the future of Laxcon Steel with Steel360.
Excerpts of Interview
Q. At what capacity Laxcon steel is working currently? How was the performance in past years?
A. At Laxcon, we make stainless steel and alloy steel about 1,00,000 tonnes per annum and we are mainly focused on high-grade steel. The company has production capacity of 140,000 metric ton capacity per year. Presently, 35% of our total production is being exported to around 75 countries.
Two years ago, the turnover of the group was 600 crores. Last year it reached 900 crores. This year we are expecting that it will touch 1100-1150 cores.
Q. Where this high-grade steel is mainly used?
A. Mostly, high-grade steel is used in defence industry, chemicals, fertilizers, all engineering goods and in the automobile sector. Bharat Heavy Electricals Limited (BHEL) and Larsen & Toubro Limited (L&T) are some of our major buyers.
Q. Where are your factories put up?
A. We got two factories in Ahmedabad. One is only for melting, refining and rolling while in the other one, we make Bright parts and products. As far as exports are concerned, the company only export Bright products.
Q. Is your production mainly scrap based?
A. Yes, scrap is one of the key raw materials of our production. Around 80% of our total productions are made from recycled scrap and remaining is virgin metals.
Stainless steel can be produced only two ways:- one is by melting scrap, the second way is by a mixture of blending ferrous, nickel, chrome.
Q. From where are you procuring scrap?
A. At present we are importing scrap from all around the world and we import only stainless steel scrap. For ferrous scrap, we source it domestically as we use it in very little quantity. We are also the biggest importer of scrap in Ahmedabad. In the stainless steel scrap market, there is not much price difference shredded scrap and straight scrap. Presently, scrap prices are hovering around USD 1200-1250, but prices are constantly fluctuating.
Q. What is the status of competition in the stainless steel market? Who are your main competitors?
A. The number one stainless steel producer in India is Jindal Stainless Limited (JSL). They alone produce more than 50% of India’s Stainless steel, but they produce flat products only including sheets and coils. Now they are a little bit trying to enter into long products. The second biggest stainless steelmaker is Viraj Alloys Ltd and they majorly produce long products and they do not make flat products.
“Consumption of Stainless Steel Will Improve by Educating People and Spreading Awareness” – Gopal Gupta (MD LSL)
Q. Recently, Government policies are not too friendly towards stainless. What’s your reaction on that?
A. Honestly speaking, I wouldn’t say that. The government policy is the same for many years and not much has been changed.
Q. How do you see the other ways through which stainless steel could make a stronger presence?
A. The area in which we are lagging behind is the ABC sector (Primary stage of learning). If we educate people and create more awareness, then definitely the consumption will increase and this is going to help a lot to the stainless steel industry. In other country like Singapore, US, Europe, Australia you will easily observe high usage of stainless steel but in our country, it is almost negligible.
Q. How do you see the future of stainless steel in India?
A. Being in this business from past 30 years and my observations says normally, in the first half of the year prices goes up and in the second half prices slides down. I have seen this trend being followed 8 out of 10 times. So right now it’s the time for prices to go up.