Viraj Profiles Ltd., based in India, is ranked second in the world and the largest manufacturer and exporter of stainless steel long products from India. It has six manufacturing facilities for making stainless steel wire rods, bright bars, fasteners, profiles, wires, welding wires and flanges. In this interview, Neeraj Kochhar, the company’s chairman and managing director, elaborates about the company, products, future plans and expansion strategies.

V iraj Profiles Ltd., based in India, is ranked second in the world and the largest manufacturer and exporter of stainless steel long products from India. At the beginning of its business activity, Viraj was a workplace for less than 150 employees and in 1991 started its first melting shop in the industrial area of Tarapur near Mumbai. Excerpts from the interview:

Could you provide an update on the company’s present product portfolio, production infrastructure and manufacturing capacities?

Initially the company started manufacturing utensil-grade steel for the domestic market but it always kept its eye on the international market which was growing significantly. To make international presence a possibility, in 1995 Viraj started increasing its production capacity, diversifying into new grades and product range, and enhancing its production processes. Since then, Viraj Profiles Ltd. has transformed itself into the world’s second-largest stainless steel long products manufacturer with a capacity of 5,28,000 tons per annum and a human resource strength of more than 9,000 employees with an annual turnover close to USD 1.5 billion.

Today the company marks its strong presence amongst global competitors, with Viraj’s products exported to more than 1,300 customers in over 90 countries. The annual production capacity of the company is a whopping 5,28,000 tons per annum. The company recently completed two decades of its exports, credit for which goes to our esteemed clientele. partners and employees who made this possible with their diligent efforts and left no stone unturned in establishing Viraj as a global leader in SS long products. The organisation’s highest quality products are well known amongst companies operating in steel, defense, construction and structural buildings, power, petrochemical, and marine industries.

In the year 1995, we commissioned our flanges division and bright bar division and started exports of bright bars. Then after five years, in the year 2000, Mrs. Kochhar joined hands with me and we established our profiles’ division, predominantly catering to overseas’ clients. Up to 99 per cent of our total profiles products were already being exported. This was followed by wire division establishment in the year 2001 and a wire rod mill in 2005. In the year 2006, we set up our second melting shop and the fastener plant. One of our biggest achievements came our way in the year 2008 when Viraj was ranked the third-largest producer of stainless steel long products in the world. And from then on there was no looking back.

We manufacture a wide range of products using austenitic, ferritic, martensitic and duplex stainless steel grades. All our product categories are equally important to us and have equal demand across different countries. However, some of the products have specific application in a particular industry while some have a universal demand. We manufacture more than 50,000 SKUs across different product verticals. Our products have a variety of applications in industries like petrochemical plants, oil pipelines, ship building, structural designs, high-tensile cables and springs, boilers, pressure vessels, liquid storage terminals, liquid cargos ships and surgical instruments, to name a few. We are one of the largest manufacturers of flanges in the world. In fact, we are one of the largest suppliers of flanges for marine applications.

What are the company’s expansion plans for the year 2017-18?

As for the future, with a tremendous range of around 50,000 SKUs across various product categories, Viraj Profiles will not be looking for horizontal growth but will rather be focusing on vertical growth. This is being done keeping in mind the requirement of our customers and a strategy is being developed in constant consultation with them. We have, nonetheless, not ruled out new product development. With myriad markets and an ever-expanding range of applications, stainless steel is well known for being incredibly versatile. Meanwhile, we expect the building and construction sector to witness the fastest growth in the future. Elsewhere, with the developed world focused on light-weighting automobiles to reduce global warming and emissions, the demand for stainless steel is expected to accelerate over the next couple of years. With its excellent formability behaviour combined with high strength, it is leading many to tout SS as a suitable lightweight material for auto components.

We have already been exporting our fasteners and bright bars to some leading global automobile companies and are currently discussing development of new products for other companies. Our range of welding wire products – new to our stable – has been received well so far in the Indian market and we are very hopeful to carve a niche for ourselves with such solutions in the international domain too. The household sector is also expected to witness good demand, while expanding and emerging applications in renewable energy, construction, healthcare and cryogenic industries will likewise provide good opportunities, and we are fully geared to respond to those market trends.

How do you think the prime minister’s Smart Cities and Make in India campaigns will help the stainless steel long products’ industry?

While the company is resolutely international in its outlook – with exports to 1,300 customers across more than 90 countries accounting for around 90 per cent of its production – the manifold rise in domestic SS consumption in recent years raises new opportunities in the domestic space. Such growth has come off the back of a spurt in infrastructure projects, new and upgraded airports, metro railways and bus shelters, as well as household applications like stainless steel modular kitchens, furniture, outdoor application, and transportation, amongst others. What is heartening is that government institutions have realised the long-term benefits of using stainless steel and its potential growth in India is huge, given that the per capita consumption of SS in India is 1.9 kg compared with global average of 4.85 kg.

The recent announcement of the government to build around 100 smart cities and place strong emphasis on providing sound sanitation and waste management solutions are likely to give a strong push to the consumption of stainless steel. This is one of the reasons why we have started focusing on the Indian market also. Secondly, the rise in discerning sort of customers is also fueling the growth of stainless steel in the Indian market. On the same lines, the Make in India campaign has already been seeing a healthy response In terms of steel production. India’s healthy ramp-up of output in recent years has earned it the ranking of one of the largest producers worldwide today, after China, Europe and Japan. This growth, however, has its limitations, and in order to fully expand its capacity, India should take care of issues like the initial mindset resistance to the use of stainless steel due to high initial cost, endemic power shortages, and high price volatility of nickel, alongside clamping down on the unrecognised sector producing cheap quality products and also the issue of a shortage of scrap in the country.

What was the reason for opening a new office in Delhi?

Our decision to open an office in the capital city is in recognition of the size and opportunity of the market in this part of the country, whilst also acknowledging the growing demand of stainless steel products across various sectors like architecture and construction, process industry, etc. It is a very important place for us to be and we aim to increase our market penetration across all the regions in India, especially northern states.

Is the company engaged in development of any new products?

The company has developed high-strength ‘super duplex stainless steel’ – a new product used in the oil and gas industry, and in marine applications, as well as in construction where high load-bearing capacity is desired. Its corrosion resistance level is much higher than any other grade of stainless steel. Besides developing martensitic grade steel, on the value-addition and quality improvement front, Viraj Profiles has also developed precision shaft quality bright bars with the size range of 10 mm to 100 mm. In addition, we have also started producing bright bars with H8 tolerance in the size range of 10 mm to 100 mm. We have also developed special coating wires, which are used for springs and nails. This leaves a very light lubricant film on the wire and as a result, guides are not jammed, tool life is increased and epoxy coating on nails is improved during processing at the customer end.

We have also installed a material tracking system, one of its kinds in India, which gives an accurate data about the movement of raw material and finished goods on a real time basis. The new system not only gives us a correct and clear picture of the status of the material but has also proved to be a boon for our global base of customers. On the packaging front, Viraj has added new options such as Spool SH 460 and SH 390 for spring wire and also developed larger coil weight for spring wire. As value-addition to our packaging solutions, we have developed plastic strapping instead of metal strapping of up to 1 MT coils for easy handling and also to avoid damages.

In the past few years, the company has also acquired a new ring-rolling machine, a 2,000-ton forging press and a 10-ton pneumatic hammer to enhance its production capacity, alongside having installed 15 new CNC machines and big diameter machine for flanges. And the company is already in the process of installing a few more drawing machines and high-efficiency grinding machines too. With such equipment in place, the company aims to meet the increasing demand of quality stainless steel flanges. With much investment in its operations over the years, Viraj Profiles today boasts of six manufacturing plants – each facility producing stainless steel (SS) wire rods, SS bright bars, SS fasteners, SS profiles, SS wires, SS welding wires and SS flanges. The six plants have a combined production capacity of 5,28,000 TPA while the company also benefits from a 1,80,000 TPA section rolling mill.

What is the export status as of now?

As of now we are exporting our stainless steel range of products to more than 90 countries across six continents. We have now started exporting to some new destinations also such as South East Asian countries and the Middle East.

What is your outlook for the Indian steel industry vis-a-vis competition faced from Chinese companies?

The long-term perspective for India remains positive. Off late, Indian manufacturers have started shifting their focus from volume to value-based solutions, which has been receiving a very positive response from across the globe. Stainless steel demand has also been growing since the last couple of years, bringing India to the forefront of stainless steel production. Today, China is the world’s largest crude steel producer but India has been able to make its mark amongst world’s leading producers. The World Steel Association has projected Indian stainless steel industry to grow by around 5.7 per cent in 2017 whereas China’s stainless steel demand is projected to decline in the coming years. India is set out to continue its rapid development supported by industrialisation, urbanisation and the Make in India economic policy. The country’s healthy GDP growth coupled with the government’s focus on smart cities, rapid urbanisation, etc. are set to increase the demand as well as production of stainless steel in the country.

-HUNED CONTRACTOR