Midfield Industries Ltd - Stock Valuation and Financial Performance

Midfield Industries was incorporated in the year 1990 under the name “Midfield Steels Pvt. Ltd” with the object of tapping an emerging niche segment of industrial packaging in India. The company started its manufacturing activities in the year 1993 by setting up facilities at IDA Jeedimetla, Hyderabad to manufacture low tensile steel strapping with an installed capacity of 3600 MTA (Metric Tonnes per Annum). Appasani Radhakrishna and Kancherla Bala Bhanu promoted the Company. A. Radhakrishna was appointed as its Managing Director.  Madhu Mohan Reddy, the present Chairman and Managing Director, joined the Company in the year 1994 as General Manager. In the year 1997, owing personal reasons, A. Radhakrishna decided against continuing with the Company and requested K. Balabhanu & Madhu Mohan Reddy to take over the reins of the Company on ‘as is where is basis’. Accordingly, they took over the reins of the Company with K.Balabhanu appointed as the Managing Director of the company. In July 1998 K Balabhanu also decided against continuing with the company and parted ways. Madhu Mohan Reddy took over the mantle as a Promoter of the Company, as well as, the reins of the business from K. Balabhanu and was appointed as its Managing Director and continues to be so till date.

In the year 2000, with a view to tap the growing market of high tensile steel strapping the company installed heat treatment line with an installed capacity of 3600 MTPA for processing low tensile steel strapping into high tensile steel strapping. This helped it to cater to the demand emanating from industries like Steel, Aluminum, and Glass etc. The same are being marketed under the brand name ‘Mega Supreme’. Besides it increased its capacity to manufacture low tensile steel strapping by 1200 MTPA.

In the year 2002, it further expanded its product offering by commencing trading in VCI paper used for packaging of various metals to protect them from corrosion. As its existing capacity was unable to meet the demand for steel strapping, in the year 2005 the company set up a new unit with a capacity of 7200 MTA for producing low tensile strapping.

In year 2007 and 2008, it enhanced its capacities by adding facilities to manufacture angle boards with an installed capacity of 25 Lakh Meter per annum each at Hyderabad. On conclusion of these expansions it had three lines to manufacture angle board with an installed capacity of 75 Lakh meter per annum at its factory in Hyderabad. With a view to achieve economies in cost of production/distribution and enable the company cater to North Indian market more efficiently. In the year 2007, one more line with an Installed capacity to manufacture 25 lakh meter angle boards per annum was put up at Roorkee, Uttaranchal.

As the existing capacity for heat treating low tensile steel strapping was unable to meet the demand for high tensile steel strapping. In December, 2008, it installed another heat treatment line with an installed capacity of 8400 mtpa for processing low tensile steel strapping into high tensile steel strapping.

With business growing across geographies the company took a considered decision of setting up manufacturing facilities at certain key locations in India. Setting up a unit for manufacturing of angle boards unit in Roorkee, Uttaranchal was the first step in this direction. Currently the company is in the process of setting up facilities for manufacturing of low tensile steel strapping with an installed capacity of 6,000 MTPA in Thane Dist. Maharashtra. The construction of building has been completed. The erection and commissioning of the plant & machinery is currently underway. The site has access to power and water supplies. The plant is expected to be operational by August 2010.This plant is being financed by a combination of internal accruals and debt. The company has over the years funded its expansion and diversification plans through a combination of internal accruals and debt from financial institutions.

To tap the overseas market, setting up of manufacturing facilities is proposed at Sharjah, UAE from the proceeds of the issue. Going forward the company proposes to set up facilities for the manufacture steel strapping at Rourkela. The company had applied to Orissa Industrial Infrastructure Development.

The company has entered into a Joint Venture agreement with Centaur Equipos de Flejado, S. L., Company incorporated under the Laws of Spain. Pursuant to the said Joint Venture it has setup a Company called Centaur India Steels & Tools, having its registered office at Plot No. 6, Phase IV Extension, I.D.A Jeedimetla, Hyderabad – 500 055 with the objects of setting up steel strap manufacturing facility in India and to sell steel strapping tools in India as made by Centaur in Spain. Midfield Industries Limited has invested Rs.50,00,000 in the Joint Venture.

Business Offerings

The company is into bulk packaging segment of Industrial packaging catering to manufacturing companies, both within India and Overseas.

Steel Strapping

Steel Strapping products are:-

• Low Tensile Steel Strapping
• High Tensile Steel Strapping

Angle Boards

The range of angle boards includes:

• Corner Boards - Used on corners of pallet for their protection.
• Edge Protectors - Used to protect the edges of the products.
• Inner-Dia Protector - Used for paper/steel rolls to protect inner edges of the products.
• Outer Dia Protector - Used for paper/steel rolls to protect the outer edges of the products.
• Flat Boards - Are fabricated and designed for protection of fiber drums used for packaging pharmaceutical products

Seals & l- plates

Collated nails

Tools & spares

Manual tools

• Sealers
• Tensioners
• Pneumatic nailing machines

Clientele:

• Essar Steel- Hazira
• National Aluminum Company Limited – Angul
• Steel Authority of India Limited – Bhilai
• Rashtriya Ispat Nigam – Vizag
• Steel Authority of India Limited (SAIL), Bharat
• Aluminium Company Limited (BALCO),
• Tata Steel Limited,
• National Aluminium Company Limited (NALCO) and
• Hindalco Industries Ltd.

The company caters to different sectors like:

• Steel
• Aluminum
• Glass
• Copper
• Paper
• Jute
• Refractories
• Automobile
• Picture Tube
• White Goods
• Batteries

Milestones

• 1990- Company Incorporated as ‘Midfield Steels Pvt. Ltd.’
• 1993- Started Production of low tensile steel strapping with a capacity of 3600 MTPA from unit at Plot No 6, Phase-IV Extn, IDA Jeedimetla, Hyderabad - 500055, Andhra Pradesh.
• 1997 -Company came out with Rights Issue in the ratio of 4:5 for existing shareholders
• 1998- Started Production of Seals and L-Plates with a capacity of 25 million pieces/year. Mr. M Madhu Mohan Reddy took over the reins of the business from then Managing Director on ‘as is where is’ basis
• 2000- Increased capacity of low tensile steel strapping steel strapping to 4800 MTPA; Installed heat treatment plant with a capacity of 3600 MTPA to process low tensile steel strapping into high tensile steel strapping.
• 2001- Started export business with first consignment sent to Sri Lanka.
• 2002 Initiated New Business Line of trading in VCI Papers. Diversified business scope by starting ‘Operations Contract’
• 2005- Increased capacity of low tensile steel strapping steel strapping to 12000 MTPA
• 2006 - February- Started production of angle boards with a capacity of 2.5 million meters/Year and of collated nails with a capacity of 60,000 coils/Year October- capacity of collated nails expanded to 1,20,000 coils/Year.
• 2007- Started trading in Polyester strapping and Stretch Films Capacity of Collated Nail coils raised to 4,20,000 coils/Year May- Set up a plant at Roorkee, Uttaranchal, for production of Angle board with a capacity of 25 Lac meters p.a. Increased the capacity at Hyderabad to manufacture angle board also by 2.5 million.
• 2008- Additional capacity of 2.5 million angle boards/Year added at Hyderabad plant taking the cumulative capacity to 10 million meters/Year.
• 2009- Increased capacity of heat treatment plant to 12000 MTPA to process low tensile steel strapping into high tensile steel strapping.