The Hindu Business Line : Gujarat NRE plans Rs 450-cr greenfield project in AP

Corporate - New Projects
Corporate Results - Coke & Metalurgical Coke
Markets - Bonus Announcements
States - Andhra Pradesh
Gujarat NRE plans Rs 450-cr greenfield project in AP

Our Bureau

Kolkata, July 18 Gujarat NRE Coke plans to set up a greenfield, 1-million tonne coke manufacturing facility at Nellore in Andhra Pradesh. The Rs 450-crore project will be financed mostly from internal accruals and is expected to be commissioned in two years.

The company currently manufactures 1 mt of coke from its three existing facilities in Gujarat and Karnataka. An additional 0.25 mt capacity is being commissioned at Dharwad. The plant will be operational in March 2009.

Talking to newspersons following the company’s board meet here on Friday Mr Arun Kumar Jagatramka, Vice-Chairman and Managing Director, said that the company was also installing a slew of power generation capacities at a total investment of over Rs 600 crore.

“During the last one year we have installed 30 MW wind power capacity. Installation of another 30 MW at Rs 170 crore will be complete in September 2008. We are also in the process of installing 60 MW waste heat recovery power plants at our coke plants for a total investment of Rs 300 crore, he said. Once completed the total generation capacity would reach at 147.5 MW.

Gujarat NRE is also investing over $500 million in developing its two coal mines in Australia to touch the 7 mt annual coal production target in 2012-13. Of the total, $300 million is already invested. The mines are held by a wholly-owned subsidiary of the company in Australia.

Rights issue

The company dropped the rights issue proposal. “Taking advantage of the high coking coal prices, we are funding the larger part of our investments in Australia through internal accruals,” Mr Jagatramka said.

Profit growth

Riding on high coke prices, the company has posted 120 per cent growth in net profit to Rs 94 crore during the April-June quarter of this fiscal compared to the corresponding period of 2007-08.

The average net realisation of the company has gone up from Rs 8,600 a tonne to Rs 19,100 a tonne during the first quarter, leading to a 151 per cent increase in turnover to Rs 382 crore.

“Coke prices generally remain strong in the first quarter. However, this year prices are consistently moving up. From $450 a tonne in April, spot coke prices reached $600 a tonne in June and is now ruling at $700,” he said. The company sells 60 per cent production on spot basis.

Sixth bonus issue

The board recommended the issue of two bonus shares to its shareholders for every five shares held. This is the sixth bonus issue of the company since 1995-96. The dividend was also increased to 25 per cent.

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