Steelcast will supply to Caterpillar Inc
Gujarat-based Steelcast Ltd has entered into a unique long term agreement with the US$ 60 billion Caterpillar Inc. Under this agreement, Steelcast will set up dedicated manufacturing facility where steel casting products with specifications given by the US major will be made.
Elaborating on this new strategy adopted by the company, Chetan Tamboli, Chairman & MD of Steelcast Ltd, said, “A long term agreement with Caterpillar Inc gives us an assured off-take capability and access to supply high quality products to a global major. Through this agreement, we expect sales to Caterpillar to grow multi-fold from around Rs. 40 crore in 2010-11 to about Rs. 150 crore in 2015. We will now look at entering into similar long term agreements with other global majors too.”
With 2011 sales and revenues of US$ 60 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
“For this long term agreement, Caterpillar will give an interest free loan of US$ 5 million (Rs 25 crore) to Steelcast which has to be repaid over the next four years. We have been associated with Caterpillar for the last 20 years. Based on this long relationship and their confidence in our high quality manufacturing capability, the US major has for the first time entered into this unique new agreement with us,” said Mr Tamboli.
Giving an update on the other big project of Steelcast, Mr. Tamboli said that in the last week of February a team from the American Association of Rail Road had conducted an audit at the company’s manufacturing facility at Bhavnagar in Gujarat. He expects to get a final approval in a few weeks’ time and is confident of starting supplies to the US Railways from June 2012 onwards. This will make Steelcast the second steel casting company in India to get the distinction of supplying castings to the US Railways.