Failures to success: How a matric pass built over Rs 1,200 Cr alloy steel business

In 2019, India surpassed Japan in becoming the second-largest steel producer in the world. The sector is one of the largest in India, which boasts over 50 large steel plants and 650 MSMEs, contributing to half of the country’s steel production. 

The market size of alloy steel in the country is 5.5 million mt per annum, and in a span of 15 years of its foundation, SLR Metaliks Pvt Ltd has contributed about 0.3 million mt of steel annually. At present, it is eyeing to increase its share to 0.4 million mt per year, in the sluggish market scenario due to the COVID-19 pandemic. 

In an interaction with SMBStory, Founder and Managing Director of SLR Metaliks Rajkumar Goel shares his entrepreneurial journey, and how the company became one of the leading producers of alloy steel in India. 

He says, “I am just a Class 10 pass. In the 1980s, I stepped out of the house to start my own business. I started by setting up a plastic re-processing unit in my hometown Jajjhar (a small town in Haryana). My family was into the oil and petroleum business, and to start my own business, I took Rs 4.5 lakh from my father. That was the first and the last time I sought money from him.”

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However, the plastic re-processing business didn’t flourish well, and Rajkumar started exploring other areas of business and hit upon the packaging sector. 

He started supplying pouches to milk brands in Delhi, enabling them to deliver milk packets to consumer doorstep. But, this business also didn’t satiate his entrepreneurial hunger, and he ventured into the manufacturing of cement bags in the 1990s.

“The business was doing well, and we used to supply to Birla cement and other leading brands of that time. However, fate had other plans, and our factory caught fire. It was devastating and we incurred huge losses. I decided not to enter that industry, but something had to be done to earn a living, so we explored other sectors,” Rajkumar tells SMBStory. 

Rajkumar, along with his brother Naresh Goel, found great potential in the steel industry, and hence, the duo set up SLR Metaliks Pvt Ltd in 2005 using their savings. And since then, there has been no looking back. 

From failures to success

Rajkumar and Naresh set up the steel plant in Ballari, Karnataka, which specialises in the manufacturing of alloy steel, and calls for precision technology to be supplied mainly to the automotive Industry. 

The company has headquarters in Gurugram and aims to replace the import of special-grade steels by making them in-house by cost-effective and environmental-friendly methods with social development. 

SLR Metaliks’ steel plant is spread over 300 acres, comprising a blast furnace (BF) waste gas-based captive power station (6 MW), a guest house, and quarters for its executives and workforce. 

The unit is laced with state-of-the-art facilities and technologies from companies like Minitech, Brazil; Siemens (now Primetals Technologies), Italy; SMS Concast, Switzerland; Mecon, India; Edward, UK; Spectrometers from the USA, etc., to churn over 16 alloy groups, comprising various grades of steel.

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In a span of 15 years, SLR Metaliks has become one of the major market leaders in steel manufacturing and rakes Rs 1,216 crore turnover annually. 

Rajkumar says, “SLR Metaliks has core environmental considerations, and so we have contributed to reducing the carbon load on nature by consuming renewable energies to the maximum level.”

The company entered into a joint venture in 2012 with industry experts in renewable energy generation and consumption through wind power. It has adopted the “Zero Liquid Discharge (ZLD)” concept, through a dry gas cleaning plant instead of a wet scrubber, an air-cooled condenser instead of the water-cooled one, and mechanical vacuum pumps in place of conventional ejector system, among others. 

These measures have helped SLR Metaliks in reducing its water requirements, and thereby possible water pollution.

Supply chain and competition

The company has made a place for itself in the steel sector in a short period of time by supplying raw materials required for automobiles to original equipment manufacturers (OEMs). For the past two decades, it has been giving tough competition to other steel companies in the country with best-in-class technologies and machines.

The company manufactures more than 86 grades and sizes of special alloy steel and caters to automobile companies like Tata Motors, Hyundai Motors, Honda, and Mahindra, among others. It also supplies to 40 OEMs, as well as the Indian Railways and the defence sector, who are highly quality conscious.

The growth of India’s steel sector

Talking about the growth of the Indian steel sector, Rajkumar says that the sector was a bit sluggish right after the lockdown was announced. However, it didn’t take long for it to revive. In July, the steel production in the country grew 20 percent compared to the last month. 

India has also increased its import share after the anti-dumping duty was passed in 2015. Last year, it surpassed the production capacity and hit the second spot after China. Altogether, the sector can achieve nine to ten percent growth in 2021-22.

“For the steel sector to grow and contribute to the Indian economy, which the government is vouching on, other sectors like cement and automobile also needs to grow,” Rajkumar explains. 

Challenges and the way ahead

An uncompromising approach towards the quality, cost, and operational efficiency can only make SLR Metaliks stable in business, says the managing director. 

Cost-competitiveness is one of the major challenges for the business, and Rajkumar feels that the domestic players should rise to the occasion, so that cost does not escalate to promote localisation of the supply chain. 

“We are putting a rooftop solar plant to reduce the power cost. We are doing capacity enhancement with very less investment comparatively,” he adds.

The foremost plan for the company is to expand its production capacity. It also strives to emerge as the leading producer of alloy steel in the Asia-Pacific region by 2025 through investing in avant-garde innovations and capacity creation.

SLR Metaliks is also in the final stages of signing one more joint venture to generate solar power for its consumption.