Real Strips Ltd Management Discussions

The global stainless steel market size is projected to reach USD 133.84 billion by 2025, according to this report It is projected to expand at a CAGR of 5.2% during the forecast period. Increasing production of automotive and growth of construction sector are the key factors driving the growth.

Owing to high resistance to corrosion, stainless steel can be easily fabricated in building structures. Along with aesthetic purpose, it provides strength and support to various building structures. It is used in roofing, structures, fixings, drainage and water systems, handrails, and wall support products. Rising investment in this sector and number of construction activities are creating a high demand for stainless steel products.

Automotive sector is expanding at a greater pace owing to easy access to credit facility and increasing the necessity among people to own a vehicle across the world. India achieved the distinction of being the third largest steel producer globally still the industry is going through a slowdown globally and experts from the steel sector are saying that industry might remain tense next year as well.

The outlook for the global stainless steel market is improving, as purchasing activity has slightly improved.

Market participants have, for some time, been, cautiously, predicting some improvement in business conditions during. However, as yet, there have been few indications of any impending pickup in the fortunes of stainless steel-consuming industries.

COMPANY OVERVIEW

We are into the business of manufacturing cold rolled stainless steel coils/strips for more than 25 years. Since inception, we have made efforts to place ourselves in a competitive position in the industry by proactively responding to our customer requirements and continue to remain as one of the leading manufacturers of cold rolled stainless steel coils/strips in India and caters to both the markets domestic as well as International. At present the Company has customers from Tube industry, Kitchenware industiy, Pumps industry, engineering products industiy.

We want to leverage our strength in order to benefit ourselves in future so as to become the topmost player in the cold rolled stainless steel coils/strips industiy. The Company has enjoyed leading position in industry for several years, but global slowdown did not spare us either. Company incurred losses due to over dumping of Chinese material in India, which affected the sales and profits of the company. But with good capacity and strength to provide quantity and quality material your company contracted with Jindal Stainless Hisar Ltd for processing their material on Job basis so as to utilize the ideal capacity lying with the company and to reduce its overall cost and reduce its losses further. We wish to maintain to supply our products to corporate houses, increase our market share in the industiy, produce quality products at the competitive rates, adopt one of the best human resource practices and also secure various certifications for standards and quality improvement We are making all efforts to streamline the utilization of manufacturing capacity and come sustain the slowdown period so that when the time comes the company can get back on track with ease.

PRODUCTION PERFORMANCE

The company deals in a single product, i.e. cold rolled stainless steel coils/strips. The production of the company in 2020-2021 is 36423 MT.

SWOT ANALYSIS

STRENGTH & WEAKNESS

•The main competitive strength is high quality products, product innovation and technological development, efficiency, and skilled manpower.

•The challenges are linked to the cost and availability of inputs i.e. raw materials, energy etc., and competition from Chinese producers.

•The business mood is cautious yet quite buoyant. But there is a lot of hard work required since the going is tough.

OPPORTUNITIES & THREATS

• Re-instated integrated facility accredited with quality and ISO certifications.

• Acceptance of the Company products in quality-conscious markets.

• Government imposing safe-guard to save local industry.

• Sharp increase in electricity and other fuel costs.

• High cost of existing working capital finance.

• Weak price trends, coupled with slower demand growth.

RISKS AND CONCERNS

The Company is exposed to normal Industry risk factors like demand, supply constraints, Governmental policies etc. To optimize capacity utilization cost-effectively, the Company has been trying to address working capital concerns. Also, with increasing Government concerns on environment protection and general awareness thereon, environment protection has to be a core focus area.

CERTIFICATION

REAL STRIPS LIMITED is an ISO 9001-2015 Certified by TUV NORD

OUT LOOK

WIND MILL DIVISION: The Company uses Green power Generation from Wind Mill. The company has its own 5 Wind Mills, the companys total Installed capacity of windmills is 4.90MW (1.25MW, 0.35MW, 0.60MW (2 Windmills] and 2.10MW). The generation of Units from wind mills during the year 2020-21 is 4818059 Units.

INTERNAL CONTROLS: The Company has proper and adequate systems of internal control that provides assurance on the efficiency of operations and security of assets. An independent Internal Auditor is in place to check, audit and monitor the process as per the Internal Audit Plan approved by the Audit Committee of the Company.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES: In the year under review, the overall industrial relations have been cordial and conducive to work. The Company recognizes the value and contribution of its employees, and earnestly endeavors to create a responsive organization with emphasis on performance with responsibility and accountability. Continuous appraisal of the competencies of the personnel in line with job requirements is carried out to facilitate higher levels of output and productivity.

CAUTIONARY STATEMENT: This report contains projections, estimates and expectations etc. which are just "forward-looking statements". Actual results could differ from those expressed or implied in this report Important factors that may have impact on Companys operations includes economic conditions affecting demand / supply and price conditions in the domestic and overseas markets, changes in the Government regulations / policies, tax laws and other statutes and other incidental factors. The Company assumes no responsibility to publicly modify or revise any forward looking statements on the basis of any future events or new information. Actual results may differ from those mentioned in the report.