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| Vedanta expects 9% growth in metal demand for FY'10 |
| Press Trust of India / New Delhi May 01, 2009, 16:57 IST |
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Vedanta Resources, a global metal and mining company promoted by NRI billionaire Anil Agarwal, expects the demand for metals like zinc, aluminium and copper to grow by around nine per cent in India this fiscal on the back of the country's projected economic growth.
"...The commodity demand grows about 1.5 times of the GDP. So if you believe that India will continue to grow at six per cent (in this fiscal) we would expect the growth rate of the metals at 9 per cent," Vedanta Resources Deputy Executive Chairman Navin Agarwal said during an analyst conference call.
Hit by the global economic downturn and following crash in metal prices, Vedanta Resources' Indian arm Sterlite posted a 55 per cent fall in profit to Rs 598.25 crore for the fourth quarter of 2008-09.
However, the firm is hopeful of a double-digit growth in demand for its metals soon, and sees fiscal stimuli announced by the government in the past few months bearing fruits for the ailing sectors like infrastructure and pushing up the economic growth to 9-10 per cent.
"In the past we have seen double-digit growth (in metal demand). With the kind of infrastructure spent the country is continuing to make across sectors like power, telecom...A 9-10 per cent growth is something which is going to happen," Agarwal added.
The Indian government has unveiled as many as three fiscal measures to boost growth in the infrastructure sector and stimulate the economy.
The metal and mining major said it meets about 90 per cent of the country's zinc and up to 50 per cent of copper's requirement. Sterlite also aims to take the aluminium capacity of its firm Balco, the country's largest aluminium producer, to 2.6 million tonnes per annum (MTPA) by 2010. Balco had an output of 3,57,000 tonnes of the aluminium during the last fiscal.
During the fourth quarter, LME prices of aluminium fell by 50 per cent to USD 1,360 a tonne compared with USD 2,729 a tonne in the year-ago period. Prices of copper and zinc have fallen by more than half as against rates prevailing in early 2008.
Facing a fall in demand for its products like aluminium, copper, zinc, Vedanta Resources had taken several measures like initiating a capital expenditure reduction programme and planned shutdowns of its various plants.
However, the conglomerate expects its expansion plans to get completed on time and added that at present it is sitting at cash reserves of Rs 19,287 crore.
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