The Hindu Business Line : Graphite India to firm up investment plans in July

Looking ahead Domestic capacity likely to be raised in two years. War chest ready for expansion/acquisition plans. Rs 6.07-crore expansion at the pipes facility to be commissioned by September.

Kolkata , May 18

Graphite India is to firm up investment plans in July. Mr K.K. Bangur, Chairman, told Business Line that early in July the plan would be ready.

Currently the company, which is among the top five graphite electrode manufacturers of the world with a global market share of around 8 per cent, is exploring the possibility of overseas acquisition and also augmenting its capacity further.

Brownfield growth avenues

Mr Bangur, however, said brownfield growth opportunities are very limited now as globally the electrode industry has gone through a process of consolidation in the last couple of years or so.

Graphite India has acquired a sick German facility, turned it around and augmented its capacity to 18,000 tpa during the last fiscal.

The company's domestic production capacity has now reached 60,000 tpa. Indications are that even if it opts for an organic growth path, the domestic capacity would further be raised within a couple of years.

A war chest for acquisition or capacity expansion is in place. The company had recently garnered Rs 111 crore by selling surplus land.

Global demand for electrodes for steel making through electric arc furnace route is estimated to grow at a steady pace in the next 10 years or so. "At present, healthy demand in the local and international markets are providing better margin," Mr Bangur said.

Exports take care of around 70 per cent of Graphite India's combined production.

Pipes division

Meanwhile, its two Nashik-located divisions for glass reinforced plastic pipes/tanks and impervious graphite equipment are poised to grow dramatically this fiscal.

Pipes division's order book in the first two months of 2006-07 is over Rs 70 crore, against 2005-06 total turnover of Rs 20 crore.

The division has bagged an order worth Rs 67 crore from Gujarat Industrial Development Corporation. A Rs 6.07-crore expansion at the pipes facility (for water and sewage), to be commissioned by September, is likely to help the company to meet the growing demand for these price competitive products from the domestic infrastructure sector, Mr Bangur said.

The equipment division is set to grow by around 50 per cent during the current fiscal in terms of turnover. "However, these value-added products' influence on the bottomline would be higher," he added.