Interview with Rajratan Global Wire Ltd

Expanding horizons to gratify customer needs and business development.

Continuing to be the lowest cost manufacturer of bead wire and generating significant operating leverage in the business are some of our growth levers says, Yashovardhan Chordia, Director, Rajratan Thai Wire Co Ltd. The company is based in India as well as Thailand. In Thailand, the company is operating as Rajratan Thai Wire Co. Ltd.

Rajratan Global Wire net sales for Q2FY22 stood at Rs 241.17 crore up 73.5% on a YoY basis. Net profit jumped by 140.7% on an annual basis to Rs 32.6 crore. What factors contributed the most to help you outperform?

Main factors that contributed to the latest results were strong demand from our customers. The operating leverage that we have in India today by having the largest production capacity in one location and our continued efforts to keep control on (and reduce) our conversion costs as well as operating costs. Going forward, once we expand in Thailand, we will have similar volume leverage and it will make us even more competitive in the coming few years. We expect all factors to continue to support our growth in the near future. 

Can you shed some light on Rajratan Global Wire's ongoing capital expansion and capacity addition plans?

Currently we are in the process of expanding our capacity in Thailand from 40,000 TPA to 60,000 TPA, which is slated to come on stream by Q4FY22. This will take our total consolidated bead wire capacity to 120,000 TPA, of which 60,000 TPA is in India and 60,000 TPA will be in Thailand by end of FY22. With this expansion coming on stream, we will have significant capacity on offer for meeting the increasing demand of our customers. 

We have also further announced our plans for a greenfield facility in Chennai, Tamil Nadu for which we have signed an MoU with the state government. This facility will have a capacity of 60,000 TPA at an estimated cost of Rs 300 crore, to be set up over the next 24-36 months, from the groundbreaking activity.

What are your growth levers?

Our key growth levers are the following: 

1)Capacity expansion at our Thailand plant to 60,000 TPA

2)New port-based greenfield facility in India to meet growing domestic and export demand.

3)Continuing to be the lowest cost manufacturer of bead wire.

4)Generating significant operating leverage in our business led by strong control on costs as well as sizeable capacities at all our manufacturing locations.

5)All our future growth plans in bead wire will be funded from internal accruals or low-cost debt.

What are your top 3 strategic priorities?

Our top three strategic priorities today are:

1)Completion of expansion in Thailand and setting up of our greenfield facility at Chennai.

2) Enhancing our efforts on the sustainability front - reducing water consumption to 1/3rd, working on sustainable procurement and reducing all kinds of emissions from our production facilities.

3) Developing our R&D team to work closely with our customers and curating higher quality and new styles of bead wire which will help our customers to meet new government norms. Additionally, we also plan on the digitalization of our shop floor and related activities.