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| Ennore Coke chalks out Rs 700 crore expansion |
| T E Narasimhan / Chennai Sep 24, 2009, 00:07 IST |
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Ennore Coke Ltd is looking for a private equity fund to support its investment plan of around Rs 700 crore over the next three years. The plan includes acquisition of coal mines overseas and sick units in India besides enhancing the production capacity.
Ennore Coke, listed on the Bombay Stock Exchange, is an associate company of Shriram EPC Ltd, part of the Chennai-based diversified Shriram group. It produces coke, a key raw material in steel production.
“We are looking at investing around Rs 700 crore over the next three years in expansion and acquisitions. This would help the company reach its target of around Rs 2,000 crore turnover by 2011-12,” company president and chief executive officer Ganesh Natarajan told Business Standard on the sidelines of the annual general meeting on Tuesday. For 2007-08, its turnover stood at Rs 101.60 crore.
The company would increase the total capacity to one million tonne by 2010-11 from the current 520,000 tonne at its facilities in Haldia, Orissa and Gujarat. This apart, it would enter into more contract manufacturing arrangements.
Natarajan said they would require 1.4 million tonne coal by 2010-11, for which the company is planning to acquire coal mines in Australia and at Virginia in the US. “The acquisition cost would be around $50 million (Rs 240 crore).”
The proposed investment will be funded through debt and equity. “We are looking at diluting up to 25 per cent to the private equity fund,” said Natarajan. He declined to disclose the quantum of money that would be raised. “It would vary from project to project. We are yet to take a call on the value and per centage.”
Earlier addressing the shareholders, Natarajan said the company would focus on small and large medium enterprises, the segment which is currently catered by Chinese manufacturers.
For this, “We have appointed stockist in Belgaum, Kolaphur, Bangalore and Coimbatore, which are the major foundry clusters. Customers can now buy minimum 500 kg to maximum 200 tonnes of coke.” The model would be introduced in nine more industry clusters in the country.
Ennore Coke has started exports to the US and Pakistan on a trial basis and has got orders from Brazil and South Africa. It would also take its products to Sri Lanka and Indonesia.
Merger approval
The Madras High Court has given its approval to merge Ennore Power & Coke Pvt Ltd with Ennore Coke Ltd. The proposal was approved by the board in January following which the application was moved to the high court.
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