Rama Steel Tubes (RSTL), a manufacturer of steel pipes, GI pipes and tubes in India, on Tuesday said that it has inked a strategic Memorandum of Understanding (MoU) with JSW Steel Group. The MoU will help facilitate procurement of Hot Rolled Coils (HRC) used in manufacturing of RSTL’s steel tubes and pipes, distribution of HRCs produced by JSW Steel in the western region, and manufacturing of value added product, the pre galvanized pipes, in agreement with JSW Steel Coated Products Ltd.
“The MoU will facilitate RSTL to procure 1,00,000 tons of HRC from JSW Steel on a pan-India basis to support its manufacturing of various steel tubes and pipes. The MoU will enable RSTL to have greater control on its procurement, supply chain while yielding competitive raw material cost,” it said in a regulatory filing. The MoU also established RSTL as the official distributor of JSW Steel for distribution of HRC in the western region.
Further, RSTL also said that it has entered into an agreement with JSW Steel Coated Products Limited to produce 200,000 tons per annum of high value, pre-galvanized pipes, under the style and brand name of ‘JSW Kalinga’ for western region.
“This Memorandum of Understanding (MoU) brings forth a multitude of competitive advantages for us. Firstly, it provides us with access to top-tier raw materials of exceptional quality, all at competitive prices. Secondly, it empowers us to enhance our procurement process, ensuring prompt and efficient sourcing, thereby bolstering our supply chain management capabilities. Ultimately, this will lead to streamlined operations, improved overall efficiency and in turn beIer profitability,” said the management team of RSTL.
The company further stated that it will harness the vast distribution network and brand strength of the JSW Steel Group. “This collaboration positions us to make significant strides in capturing market share across various product ranges,” it said. RSTL will start the procurement and distribution of HRC and production of pre- galvanised pipes with immediate effect and this, the company stated, has a potential to contribute additional volumes of 1,00,000 ton on a per annum basis in the first year.
RSTL has a 20 per cent exports rate, with a global presence in more than 16 countries. It currently has an aggregate capacity of 2.94 lakh MTPA. It has four state-of-the-art manufacturing capabilities. RSTL has recently acquired 51 per cent stake in Ashoka Infrasteel (partnership firm) and 50 per cent stake in Hagar Mega Mart Private Limited. RSTL also have 25 per cent stake in Peer Panchal ConstrucLon (JV) and has a strong distributor network spread across India.