Financial Daily from THE HINDU group of publications
Friday, Apr 02, 2004

Cross Currency

Group Sites

Corporate - Performance

MMTC Singapore arm posts record turnover — Makes foray into sophisticated, competitive markets

G. Srinivasan

Mr S.D. Kapoor, CMD

New Delhi , April 1

MMTC's wholly-owned overseas subsidiary, MMTC Transnational Pte Ltd (MTPL), Singapore, has logged the highest business turnover in the fiscal year just ended, ever since its inception a decade ago, thanks to the pursuit of "sustained growth-oriented strategies focused on consistent product and market diversification", according to the Chairman and Managing Director, Mr S.D. Kapoor.

He told Business Line that MTPL's business turnover during 2003-04 fiscal was Singapore dollar (S$) 318 million, reflecting a 28 per cent growth over 2002-03 turnover of S$ 248 million, which itself was over and above the growth of 32 per cent in 2002-03.

He said the company compassed 300 per cent growth in its fertilisers operations by adding new products and has also diversified into steel exports by enlarging its product profile and opening new market outlets.

The Singapore subsidiary is "successful in making foray into highly sophisticated and fiercely competitive markets like South Korea for hot-rolled plates, Thailand for billets", besides adding Sri Lanka as a destination for steel products.

Mr Kapoor noted that a digit growth was registered in the export of iron ore pellets out of India with an increase in business from S$14 million in 2002-03 to S$ 36 million in 2003-04, besides substantially stepping up its stake in mineral exports including iron ore and chrome ore by augmenting business volumes by 29 per cent in fiscal 2003.

As edible oil imports into India has grown substantially in fiscal 2003, MTPL has duly leveraged its strategic location in the trading hub in South-East Asia to step up its business volumes. It effectively sourced palm oil for supply into India and more than doubled its business volumes in edible oils during the year.

The company's core area of operations cover trading in minerals, metals, fertilisers and fertiliser raw materials, coal and hydrocarbons, agro products, steel, machinery, industrial raw materials and "it has become a good experience dealing with the subsidiary and as a result of all its trading activities, MTPL was conferred the status of Approved International Trade (AIT) by the Trade Development Board of Singapore".

Mr Kapoor said once the company is given the status based on stringent criteria, it not only has to maintain its status but also must continuously improve by growing at a certain pace, generating profit year after year and incurring certain minimum expenditure in local infrastructure. "For this, we get tax rebates and we get nominated in trade bodies of the Singapore Government. Thus, there are certain criteria you have got to meet and certain benefits you derive".

Asked about the target for the current fiscal, which has just begun, he said that MTPL would achieve over 20 per cent growth in business volumes and profits, which would be obtained through further consolidating its business activity and adding new product-lines.

The company's net worth has increased four-fold since inception and with the likely dividend payout this year, it would pay back the total paid-up equity through dividends to MMTC.

Since steel prices have firmed up with domestic demand too perking up in the face of rising GDP growth rates, Mr Kapoor admitted that sourcing of steel exports to MTPL would have to be different from India, though its own-promoted Neelachal Ispat Nigam Ltd (NINL) produces export surplus. Steel exports from India in this new fiscal would be under pressure. He said, "This is the main difficulty in the trading front. You are in a particular activity today, but you have to vacate because of environmental compulsions and you keep changing product mix. We did so good in steel in MTPL last year and we may have to look for steel business not from India but from other sources".

Alongside, he said, MTPL is also looking for sourcing raw materials for India particularly fertilisers and fertilisers raw materials including muriate of potash, diammonium phosphate, rock phosphate, sulphur and phosphoric acid and industrial raw materials and non-ferrous metals and the like.

To a specific query as to whether MMTC would be given the sole status of exporting iron ore to China in order to leverage import of metallurgical coke from China into India, Mr Kapoor clarified that as of now, the company's exports of iron ore to China was just 10 per cent of 30 million tonnes (mt) being exported from other sources in India.

Out of 2.9 mt of import of metallurgical coke from China, MMTC imported barely half-a-million tonne, constituting 17 per cent of the country's total imports. "Since we are into both the business we can handle the situation with our vast experience", he said adding that this in no way detracts others from trading in these vital industrial raw materials.

More Stories on : Performance | Metals

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Reliance, Niko find gas in K-G Basin

Godavari Fert ceases to be CFL subsidiary
Orchid's anti-diabetic molecule clears clinical trials
Continental to source tyre tubes from Metro
No clearance to ChemPlast Krishnapatnam unit
Assocham plea to abolish MAT
Bharat Petroleum announces VRS
Tata Steel, workers' union in pact for JUSCO transfer
Spanco issue
Kerala Cabinet okays Trayons promoter's revival plan
LG bullish on India; plans to triple growth
Philips India aims 100 pc growth in 5 yrs — Proposes to sell HTP unit
Tata Steel output touches 4 million tonnes
Hero Honda sales cross two-million mark in a year
MMTC Singapore arm posts record turnover — Makes foray into sophisticated, competitive markets
Maruti sales rise 30 pc in 2003-04
HPC, subsidiary post Rs 870-cr combined turnover
Bajaj Auto sales rise 26 pc
BEML posts Rs 1,771-cr sales turnover
TVS Motor sales grow at 2.5 pc
Ford India scores record sales in March
HAL registers record turnover at Rs 3,690 cr
New VSP Director
Coke gets reprieve in Kerala

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line