The Hindu Business Line : Nalco metal sales hit high growth in 2006-07

Work in progress
In the process of tapping external borrowing to raise €150 million.
2nd phase expansion projects scheduled to be completed by 2008 end.
Examining proposals for setting up JV projects overseas.

Our Bureau

Bhubaneswar, Sept. 21 In the 26th annual general meeting of National Aluminium Company Ltd (NALCO) held here on Friday, the shareholders of the company approved the annual accounts for 2006-07 with the highest-ever dividend payout of 75 per cent amounting to Rs 483.23 crore.

The dividend includes 35 per cent first interim dividend paid during February and 15 per cent second interim dividend paid in March on the paid-up equity share capital of Rs 644.31 crore, as compared to 50 per cent dividend amounting to Rs 322.16 crore paid for the previous year.

The shareholders also approved the highest-ever sales turnover of Rs 6,515 crore, the highest-ever export earning of Rs 2,585 crore, and highest-ever net profit of Rs 2,381 crore.

Addressing the AGM, the Chairman-cum-Managing Director, Mr C.R. Pradhan, said NALCO achieved the highest sale of 3,56,616 million tonnes (mt) of metal during 2006-07, surpassing the previous highest of 3,53,841 mt in 2005-06.

Similarly, the sale of 2,63,494 mt of metal in the domestic market surpassed the previous highest of 2,58,094 mt achieved in 2005-06, he said.

MoU aids

The system of entering into annual MoU with domestic customers for sale of aluminium metal, by providing benefits and incentives, helped NALCO achieve a growth of approximately 2.1 per cent of sales in the domestic market over the previous financial year.

Besides, for the third consecutive year, NALCO continued to remain a ‘Zero Debt’ company. The company utilised its internal cash generation to meet its working capital and capex requirements and it had not utilised any borrowing facility during the year.

“So far, we have been funding the expansion activities through internal accruals. However, to meet the foreign cost component of the ongoing project, we are in the process of tapping the external borrowing to raise €150 million. Quite a few banks and merchant bankers have responded to the bids invited by us,” Mr Pradhan said.

Growth underway

About growth plans, Mr Pradhan said NALCO was currently implementing the second phase expansion with an investment of Rs 5,003 crore. These projects are scheduled to be completed by the end of 2008, which will raise the bauxite mines capacity to 63 lakh tonnes, alumina refinery capacity to 21 lakh tonnes, aluminium smelter capacity to 4.60 lakh tonnes and captive power plant capacity to 1,200 MW.

Besides its brownfield expansion, NALCO is examining some proposals for setting up a joint venture project overseas for smelter, to add value to surplus alumina to the tune of 12 lakh tonnes to be available after completion of the second phase expansion.

Material plans

The company is also exploring the possibility of setting up backward integration projects to ensure steady supply of some of the raw materials and for insulating the company from price uncertainties.

These proposals are being actively pursued and the final views will be taken in the current fiscal, Mr Pradhan said. NALCO is also asking the Government for new bauxite mining leases at Gandhamardan, allotment of pottangi bauxite deposit in Orissa, and Jerrela bauxite deposit in Andhra Pradesh, he added.

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