TARIL Strengthens Supply Chain with Strategic Stake Acquisition in PPESPL
On January 30, 2025, Transformers & Rectifiers (India) Ltd made a significant move towards achieving complete backward integration by acquiring a 51% controlling stake in Posco-Poggenamp Electrical Steel Pvt Ltd. This acquisition solidifies TARIL's position in the electrical steel sector and enhances its ability to control the quality and consistency of key materials used in transformer and reactor production.
Details of the Acquisition
TARIL acquired 137.70 lakh equity shares of PPESPL from existing shareholders, which represents a 51% share in the company’s total paid-up capital. This strategic investment is a continuation of TARIL's plan, which was first outlined in November 2024, to integrate vertically and establish a comprehensive supply chain for its operations.
By obtaining control over PPESPL, TARIL now holds direct oversight of the CRGO (cold-rolled grain oriented) electrical steel manufacturing process, a critical raw material for transformer and reactor production. CRGO steel accounts for 33% to 35% of the total raw material cost for these devices, making it an essential component in ensuring high-quality and efficient performance.
PPESPL’s Manufacturing Capacity
Founded in 2010, PPESPL is a leading manufacturer of CRGO laminations for transformers and reactors up to the 765kV class/500 MVA rating and can even produce for 1,200kV class/1,000 MVA rating. The company’s CRGO processing capacity stands at 24,000 metric tons per year, making it one of the largest producers of its kind in India. This capacity aligns well with TARIL's long-term goals of expanding its manufacturing capabilities and improving product offerings.
TARIL’s Strategic Plan for Backward Integration
In October 2024, Jitendra U. Mamtora, Chairman of TARIL, emphasized the company’s commitment to achieving full backward integration. This move involves several key initiatives, including:
• Acquiring a CRGO processing facility based in Gujarat.
• Collaborating with global suppliers to secure a steady supply of CRGO material.
• Partnering with a leading manufacturer to produce RIP (resin impregnated paper) bushings.
• Expanding overall manufacturing capacity by 15,000 MVA per year.
By integrating these steps, TARIL aims to enhance its control over the entire supply chain, from the sourcing of raw materials to the final production of transformers and reactors.
Significance of CRGO Steel in Transformer Manufacturing
CRGO steel is a vital material used in the production of transformers and reactors. It is crucial for ensuring the efficient performance of these devices, as it helps minimize energy losses and improves operational reliability. The stringent quality control required in CRGO processing makes it a critical element of the manufacturing process.
Through this acquisition, TARIL not only secures a dedicated CRGO processing plant but also gains direct oversight over the quality and specifications of the electrical steel. This strategic move will provide greater stability to TARIL's supply chain and improve the overall quality of its transformer and
