SS Pipe Manufacturing Unit For Sale In Bareilly

About Business

The company specializes in manufacturing premium-quality stainless steel pipes in various shapes and sizes, tailored to meet the needs of their clients. They produce round, square, and rectangular pipes, leveraging superior machinery designed by a Vietnamese designer, known for their advanced technology compared to Chinese counterparts.

Clientele type

The company has a strong dealer network across UP and NCR, with significant demand in Bareilly district.

Premises

LEASED

Lease per month (in INR): 65.00 K

Security Deposit (in INR): 15.00 L

Carpet Area: 5,000 sq ft

Asking Price Includes

Asking price includes everything.

Reason

The promoter is over 60 years old, and the next generation is established in a different industry, prompting the decision to sell the business.

More Details

For sale is a stainless steel pipe manufacturing business established in January 2020 in Bareilly District, Uttar Pradesh, India, with a production capacity of 90-125 tons per month, offering premium-quality round, square, and rectangular pipes in Grade 202 and Grade 304, marketed under the trusted brand name "DMB."


Market Demand:
Monthly Consumption:
- The monthly consumption of stainless steel pipes in Bareilly is approximately **300 tons**.
- The nearby city of Moradabad has a higher demand, consuming around **500 tons** monthly.

More Information: - This indicates a significant market opportunity for expanding distribution to cater to the demand in Moradabad and surrounding areas.
- The business can leverage its production capacity to meet the needs of these markets effectively.
- Establishing relationships with local suppliers and customers can further enhance market reach and sales potential.

Market Challenges:
The company has encountered significant financial difficulties since April 2022 due to a global crash in the stainless steel market, which led to decreased prices for raw materials.
These price fluctuations have impacted profit margins, forcing the company to sell finished goods at lower rates and adversely affecting its working capital.

Current Operations:
Production has been halted due to personal reasons and the aging of the current management team, with the next generation pursuing careers in different industries.

Regulatory Environment:
The Indian government has imposed anti-dumping duties on imported stainless steel, creating a more favorable environment for domestic manufacturers. Additionally, the
implementation of BIS (Bureau of Indian Standards) for imported raw materials has further enhanced the market for local producers.

Financial Overview:
The company has a CC (Cash Credit) Limit under the CGTMSE Scheme from Punjab and Sind Bank amounting to INR 85 lakhs.
Despite their operational challenges, they are positioned for future growth given the anticipated increase in demand for stainless steel pipes in the region.

Financial Summary
Trial Production Period (January 7, 2020, to March 20, 2020): Turnover: INR 2,500,000
2020-21 (due to COVID-19): Turnover: INR 25,652,799.21 + GST @ 18%
2021-22 (due to COVID-19): Turnover: INR 30,361,401.94 + GST @ 18%
2022-23: Turnover: INR 1,31,54,908.95 + GST @ 18%

Despite their current challenges, the business holds significant potential due to the growing demand for stainless steel products and the limitations on imports. If operations are resumed effectively, there is considerable room for recovery and growth in the market.