The Hindu Business Line : Vesuvius to go for capacity expansion

THE upswing in the domestic steel sector has invigorated Vesuvius India Ltd to chalk out plans to increase its refractory production capacity from 600-650 pieces per day to 1,200-1,500 pieces per day within the next two years.

Stating this while talking to reporters shortly after the conclusion of the company's 13th annual general meeting held here on Tuesday, Mr Jean-Pierre Malherbe, Director of Vesuvius India Ltd, said the company was open to the idea of expanding its existing manufacturing facilities or even setting up a greenfield project.

Acquisitions, too, would be a key driver of growth for the company in the days ahead. A firm decision in this regard would be taken in the next 4-5 months.

Mr Malherbe said domestic steel production was expected to go up to 50 million tonnes by 2006 and 100 million tonnes by 2010. As such, the demand for refractories would go up proportionately.

The company, which clocked a 27 per cent turnover growth in 2003 over 2002, was hopeful of sustaining the momentum in growth in the years ahead. Besides, about 10 per cent of the total revenue would be accounted for by exports to countries such as South Africa, Germany, Taiwan and other South Asian countries.

According to Mr Biswadip Gupta, Managing Director of Vesuvius India Ltd, the company "could think of splitting its shares" with a view to ensuring liquidity in the capital markets.

He ruled out the possibility of a bonus issue from the company.

During the year ended December 31, 2003, Vesuvius India notched a turnover of Rs 136.13 crore, up from Rs 107.27 crore in 2002.

The profit before tax in 2003 stood at Rs 27.06 crore against Rs 22.43 crore in 2002.

The profit after tax in 2003 was Rs 20.85 crore compared with Rs 16.60 crore in 2002.

A dividend of Rs 3 (30 per cent) was declared for the year gone by. Earlier, the company had declared a 10th anniversary special dividend of Re 1 (10 per cent) per share.

The board of directors of the company met here on Tuesday to take on record the unaudited financial results for the quarter ended March 31, 2004.

During the period under review, Vesuvius India recorded a turnover of Rs 33.90 crore, up from Rs 28.04 crore recorded during January-March 2003.

The profit before tax during the quarter January-March 2004 stood at Rs 6.87 crore against Rs 5.71 crore in the corresponding quarter of last year.

The profit after tax during the period under review was Rs 4.85 crore compared with Rs 4.08 crore in January-March 2003.