The Hindu Business Line : Gujarat NRE Coke plans Rs 235-cr investments

Ahmedabad April 14 Leading manufacturer of low-ash metallurgical coke and India's only listed company in the sector Gujarat NRE Coke Ltd is now set to invest Rs 235 crore in its three Indian facilities and $60 million in its Australian and New Zealand properties.

The company is set to double its coke-making capacities at Dharwad in Karnataka with an investment of Rs 70 crore. It is also investing Rs 15 crore in setting up a coal washery at Bhachau in Kutch district of Gujarat. Moreover, it is also investing Rs 150 crore in setting up power generation facility from waste heat at its Dharwad, Khambalia (Jamnagar) and Bhachau plants, 15 MW each, which will be operational by 2009.

At the same time, Gujarat NRE Coke is consolidating its Australian and New Zealand operations spread over mining and resource prospecting, acquired last year, with an investment of $60 million, Mr Arun Kumar Jagadramka, Vice-Chairman and Managing Director, told reporters here on Friday.

Higher coal production

It is set to increase its coal production from the current one million tonne to 5.5 mt in the next four years at its first coal mine in Australia's New South Wales. Similarly, the coking coal production from NRE Avondale will reach 1.5 mt per annum by 2010.

These steps were being taken in view of the increased profit margins in coke and the potential increase in its demand due to the projected production of crude steel from the current 44 mt to 50 mt in India in the next five years. This will require an additional 35 mt of coke. India is currently importing 19 mt of coking coal, 85 per cent of which is from Australia. In the next two years, the demand for coke is projected to go up from 22.26 mt to 26.24 mt, he said.

The net import demand of equivalent coal would increase from 27 mt to 75 mt by 2011-12. By 2020, India's steel production is expected to reach more than 100 mt per annum.

PBT zooms

Net sales of Gujarat NRE Coke increased from Rs 83.95 crore in March 2006 to Rs 179.01 crore in the quarter ended March 31 this year, a growth of 113 per cent.

This has resulted in a 1,360 per cent jump in PBT from Rs 4.14 crore to Rs 60.45 crore in 2006-07. Its bottom-line also increased as earnings per share went up to 173 per cent from Re 0.56 to Rs 2.09 in the quarter ended March 31, 2007.

The company's book value has also gone up from Rs 21.77 per share to Rs 23.91.

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