The Hindu Business Line : MMTC plans Rs 20,000-cr investment

Bolstered by the buoyant financial fundamentals MMTC, has set out plans to promote many new trade-related infrastructure projects in the country in the near future with an investment of about Rs 20,000 crore.

Disclosing this to Business Line here, the Chairman and Managing Director, MMTC, Mr S.D. Kapoor, said the company had resolved to set up four free trade warehousing zones. It has also determined to invest in the development of resources abroad for items imported on a perennial basis in India to cope with the national demand/supply gap, besides entering into long-term strategic alliances/joint ventures for energy inputs. He said the company planned to enter into wind energy farm, besides putting up power plants in Haryana, Orissa and Gujarat.

He further disclosed that the company recently tied up long-term supply of iron ore, both lumps and fines, with Japan and South Korea at a price that is 19 per cent higher for 2006-07 than the previous long-term contract (five year tenure) that ended in March 2006.

According to the company spokesperson, at its board meeting held here on Monday, MMTC has recommended dividend payout of 50 per cent for 2005-06, which includes interim dividend of 25 per cent already disbursed to the shareholders. MMTC has registered business volumes of Rs 16,362 crore during fiscal 2005-06, which is the highest-ever level achieved by the company since its inception in 1963.

The record turnover of the company comprised export business of Rs 2,925 crore and import transaction totalling Rs 11,786 crore. The company's domestic trade reached a high of Rs 1,651 crore, notching up a growth of 56 per cent over the previous year.

The net profit earned by MMTC was Rs 108.29 crore, the highest-ever achieved, albeit the pressure on margins. The company was able to achieve this by consciously diversifying into new areas, efficient resource management and prudent tax planning. With this, the company has realised Rs 21.66 earnings per share on a face value of Rs 10. After providing for dividends and transfer of surplus to general reserves, MMTC's net worth has increased to Rs 830 crore `with zero' long-term debt.

With this networth and projected revenues, MMTC had decided to take up a capital expenditure of Rs 20,000 crore by focussing its role as a trade organiser and trade facilitator for the country, Mr Kapoor said.

Stating that the company had taken multiple strategic initiatives during the year to improve logistics, service quality and other operational efficiency so as to provide long-term sustainability, Mr Kapoor said the company hadtentatively fixed a physical turnover target of Rs 20,000 crore for the current fiscal.

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