WHAT WE DO
Our long standing presence in the region is based on our commitment. We demonstrate this through capital investments we have made in manpower, management, manufacturing facilities, office space and infrastructure.
Mr. Pillai was always fascinated with commodities. He knew that any company involved with commodities, would require specialized knowledge and analytical capabilities. In order to penetrate this industry, he chose two industries that made the most sense to him, which were rubber and steel. KGC has on-going industrial operations in Erbil, Kuwait and various locations in India. KGC owns rubber plantations in Kerala, India and has a joint venture Steel Mill in Erbil, Iraq.
The decision to move into the rubber industry was very easy, the land needed is very inexpensive and the overhead is low. After identifying these two factors, it was a simple task of finding the right plantations (in Kerala) to purchase.
In 2010, India's natural rubber consumption stood at 0.978 million tons per year, with production at 0.893 million tons; the rest was imported with an import duty of 20%. Since the bulk of the rubber produced is the synthetic variety, derived from petroleum, the price of even natural rubber is determined to a very large extent by the prevailing global price of crude oil.
Natural rubber is still important industrially. The use of rubber is widespread, ranging from household to industrial products, entering the production stream at the intermediate stage, or as final products. Tires and tubes are the largest consumers of rubber. The remaining 44% are taken up by the general rubber goods (GRG) sector, which includes all products.
After identifying steel manufacturing and sale as the second investment of the industrial division of KGC, the next decision was where? KGC was attracted to building its steel mill (GK Steel) in Erbil because of the highly competitive costs on acquisition of labor, services and real property. Additionally, there is a labor pool in Kurdistan that is educated, flexible and seeking employment. Lastly, in Iraq, there is an abundance of scrap steel and a need for rebar.
A rebar (short for reinforcing bar), also known as reinforcing steel, reinforcement steel, or a deformed bar, is a common steel bar and is commonly used as a tensioning device in reinforced concrete and reinforced masonry structures holding the concrete in compression. It is usually formed from carbon steel and is given ridges for better mechanical anchoring into the concrete.
Concrete is a material that is very strong in compression, but relatively weak in tension. To compensate for this imbalance in concrete's behavior, rebar is cast into it to carry the tensile loads.
Scrap is a term used to describe recyclable materials left over from every manner of product consumption, such as parts of vehicles, building supplies and surplus materials. Often confused with waste, scrap, in fact, has significant monetary value. Overall, the scrap industry processes more than 145,000,000 short tons (129,464,286 long tons; 131,541,787 tons) of recyclable material each year into raw material feedstock for industrial manufacturing around the world. In 2007, the United States exported over $10 billion worth of scrap steel.
GK Steel currently produces 4,000 Tons of rebar on a monthly basis.