The Hindu Business Line : Surana Ind to set up steel complex at Raichur

Getting ready
The Karnataka Government has allotted 164 acres of land for setting up the steel complex.
The rolling mill will have capacity to produce 1.33 lakh tonne of special steels a year.

Thiruvananthapuram , May 2

Surana Industries Ltd is setting up an integrated steel complex at Raichur in Karnataka, mainly for production of special steel products for the automobile sector.

The complex, estimated to cost Rs 473.27 crore, will have a sponge iron unit, a steel melting shop, a captive power generation unit and a rolling mill to manufacture special steels.

The project is proposed to be financed by term loans from the banks to the tune of Rs 331.30 crore and equity capital of Rs 141.97 crore. The company is also planning to raise Rs 300 crore from the market, including premium.

Mr V.M. Swami, Director, Finance, told a group of visiting newspersonsat the company's windmill farm in Tirunelveli district of Tamil Nadu that the Karnataka Government had allotted 164 acres of land for setting up the steel complex. The company has also approached the State Government for allocation on lease of iron ore mine of at least 48 hectares.

The rolling mill will have capacity to produce 1.33 lakh tonne of special steels a year. The complex is expected to be commissioned by the end of next year.

The company's windmill farm at Radhapuram in Tirunelveli district features eight turbines of 1.5 megawatt each. The project is capable of producing around 3.80 crore units a year.

The total cost of the project is Rs 81 crore and it has been funded through bank loans of Rs 55 crore and increase in the paid-up capital, including premium, of Rs 30 crore.

Cost reduction

Mr Swami said the company paid about Rs 4.67 per unit of power consumed at its steel plant at Gummidipoondi and cold rolling mill at Madhavaram, Chennai. The windmill project would help it reduce cost by more than Rs 12 crore a year.

The company is producing 1.09 lakh tonne of thermo mechanically treated bars and 30,000 tonne of mild steel ingots annually at the Gummidipoondi plant. The Madhavaram facility has a capacity to manufacture 60,000 tonne of cold rolled products.

Results

During the year ended March 31, 2006, the company recorded sales turnoverof Rs 625.55 crore with a net profit after tax of Rs 23.44 crore. With a paid-up capital of Rs 15.50 crore, it has reserves and surpluses of Rs 76.27 crore, totalling a net worth of Rs 91.77 crore.

The earnings per share worked out to Rs 15.12.

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