Varun Industries to invest Rs 100 cr to buy rigs

Suresh P. Iyengar Mumbai | Updated on November 13, 2017

Equipment to be taken to Madagascar oil fields later

Varun Industries, which has diverse interests in stainless steel wares, oil and gas and mining, plans to invest Rs 100 crore by first half of this fiscal to acquire four rigs for leasing to oil exploration companies.

Mr Kiran Mehta, Chairman and Managing Director, Varun Industries, said the company is close to bagging orders from an oil exploration company for rigs that will be used on the shores of Rajasthan and Gujarat.

“We will invest Rs 100 crore to buy three to four rigs with a long-term perspective to shift them to our oil fields at Madagascar in South Africa,” he added.

At present, the company has one rig deployed in the north-eastern region by ONGC and earns about Rs 16 crore a year from the lease.

The company owns 1,100 oil and gas blocks in Madagascar and plans to gain expertise in the domestic market before exploiting overseas oil blocks.

“We are planning to go in for a joint venture for developing Madagascar oilfields as we do not want to invest heavily at this stage in this sector,” Mr Mehta said.

Varun Industries recently signed a joint venture with Australia-based Cluff Resources Pacific for mines exploration in South Africa. “As per the investment deal, Cluff Resources will spend 75 per cent and Varun Industries 25 per cent, but the Australian company will get 35 per cent of the revenue generated and the remaining comes to us,” said Mr Mehta.

“According to recent test reports, one tonne of ore from the mine had 12 grams of gold against the conventional six to seven grams of gold found in same quantity of ore. Depending on progress of its plans, Varun Industries will invest Rs 2,200 crore in its new ventures over the next three years.”

The company through its Mauritius and Dubai-based subsidiaries has interest in agriculture commodity trading. It imports sugar, pulses and edible oil for its clients in India. “Given our reach and expertise, we are exploring the possibility of importing crude oil for supply to refiners,” he said.

On the domestic front, the company is close to finalising 500 acres at Bagalkot in Karnataka for setting up a five-lakh-tonne pig iron plant with an investment of Rs 2,100 crore. To be completed in five years, the pig iron plant will help achieve backward integration.

Varun Industries manufactures and exports close to 1,800 items in cookware, kitchenware and house ware from its plant in Vasai near Mumbai. The raw material for the plant is supplied from its stainless steel re-rolling plant at Jodhpur in Rajasthan.

The company is also expanding flat steel production in Rajasthan from 40,000 tonnes per annum to 1.2 lakh tonnes per annum with an investment of Rs 850 crore. The project, which expected to be completed by 2013-14, will entail an investment of Rs 240 crore in first phase.

Published on June 21, 2011

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