Indian Seamless Metal Tubes (ISMT) is on a de-bottlenecking and modernisation drive which will see its alloy steel production increase from the present 190,000 tonnes per annum to over 300,000 tonnes by June this year.

In addition to the increase in output, the Pune-based company will also save about Rs 1,600 per tonne.

"On variable costs we will save about Rs 1,000 per tonne and Rs 600 in fixed costs. Overall the company will save over Rs 50 crore per year," said Rajiv Goel, chief financial officer.

The company is using the US company, Praxair's CoJet gas injunction system for its oxygen furnace. The technology helps reduce time needed for melting scrap steel.

"With the technology, our heats per day has increased from 15 to 19. We have the scope to increase it to 24 heats per day," added Goel.

A heat is a production run or the time taken to melt the scrap steel. Each heat has a lot of 55 tonne of scrap steel. The company subsequently targets to hit the the 4.5 lakh metric-tonne per year capacity mark by 2008.

Of the 300,000 metric tonnes of alloy steel, 200,000 will be for ISMT's captive use to produce seamless tubes and the rest will be sold.

To keep in line with the increased capacity of alloy steel, production of seamless tubes will also be increased to 2.5 lakh metric tonne by 2008 from the present 1.45 lakh metric tonne.