The Hindu Business Line : Visa Steel to commission Kalinganagar plant by Sept

Visa Steel Ltd will commission the balance 3 lakh-tonnes per annum (tpa) capacity coke oven plant at the Kalinganagar Industrial Complex in Orissa in phases by September. Earlier, in March, the company had commissioned the first one lakh tonnes capacity at the plant, Mr Vishambhar Saran, Chairman of Visa Steel, told newspersons after the conclusion of the company's 10th annual general meeting — and the first after its initial public offering — held here.

The impact of the production from the coke oven plant would reflect in company's financials from the second half of the current fiscal, he said. Mr Saran said the company's plans to set up capacities at Kalinganagar were progressing satisfactorily, including the setting up of a 50,000 tpa ferro chrome plant, 3 lakh tpa sponge iron plant, 50 MW waste heat recovery power plant and a 0.5 million tpa special and stainless steel plant. The total project cost of Rs 4,500 crore was being funded by a combination of debt and equity/internal accruals in the ratio of 65:35.

Q1 Performance

An investment of Rs 1,146 crore would be made in the ferro chrome, DRI, power and steel plants within the next 18 months. "We shall invest, on an average, Rs 500 crore every year," Mr Saran said. According to him, the company had fared well in the first quarter of the current fiscal and was bullish about the future "since the outlook for special and stainless steel were quite strong."

During April-June 2006, Visa Steel recorded a revenue of Rs 113.50 crore, a rise of 78 per cent over Rs 63.80 crore recorded during the corresponding period of 2005. The EBIDTA was Rs 12.06 crore (Rs 6.25 crore) even as the profit after tax stood at Rs 8.12 crore (Rs 2.30 crore).

Joint Venture

For securing its raw material needs, Visa Steel was focussed on backward linkages into iron ore, chrome ore and coal mining. The company, along with seven others, has been allocated the Patrapara coal block in Talcher. A joint venture company has been formed and mining rights for chrome ore had been applied for.

The company's application for iron ore mines and also for an additional 500-600 acres of land at Kalinganagar to meet its expansion needs is under the consideration of the State Government. During the year ended March 31, 2006, Visa Steel recorded a total income of 384.68 crore compared to Rs 252.01 crore in 2004-05. The profit before taxation in 2005-06 was Rs 19.99 crore (Rs 11.86 crore) even as the profit after tax stood at Rs 12.47 crore (Rs 6.56 crore).

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