Haldia Coke floats US arm

Haldia Coke and Chemicals Pvt Ltd (Haldia Coke), a Shriram Group company, has floated ‘Shriram Mineral Inc’ to acquire coal mines in the United States.

The new company has already acquired two coal mines for $23 million (Rs105.8 crore) and is planning to invest another $25 million (around Rs 115 crore) to acquire more mines, said Ennore Coke Limited’s wholetime director and chief executive officer Ganesh Natarajan on the sidelines of the annual general meeting.

Haldia Coke and Chemicals Pvt Ltd is the holding company of Ennore Coke Ltd.

While one mine was acquired at Arkansas, the other was at West Virgina. Haldia holds 65 per cent in the new company and the local operating partner the remaining 35 per cent, said Natarajan.

During the current year, the company expects 120,000 tonnes of coals from these two mines and 400,000 tonnes every year thereafter. The total reserve in these two mines is be around 23 million tonnes.

He said the new acquisitions would be mainly to meet the raw material requirements of subsidiary companies, which are into metallurgical coke manufacturing.

Haldia Coke owns an 80,000 tonne per annum capacity met coke plant at Nergundi in Orissa through its wholly-owned subsidiary Wellman Coke Ltd.

In addition, it holds a 60.86 per cent stake in Ennore Coke Limited, which owns a 130,000 tonne per annum capacity met coke plant and a byproduct power plant at Haldia in West Bengal. Both the subsidiaries are in the process of increasing their capacities.

As of March 2010, Ennore Coke had a capacity of around 400,000 tonnes, including contract. This is expected to increase to a million tonne by next year. “The proposed capacity addition will not require any investment, since it will be through increasing the number of contract manufacturers,” said Natarajan.

On the other hand, Wellman Coke Ltd is planning to double its capacity to 160,000 tonnes and set up a 10 Megawatt co-generation power plant. The project will require Rs 70-75 crore, to be funded from the Rs 125-crore infused by Gaja Capital Partners, an India-focused private equity fund.

Natarajan said they might also look at reverse merger of Haldia Coke with Ennore Coke or go for an initial public offering.

On Ennore Coke’s performance, he said, the company is targeting to achieve a turnover of Rs 500 crore during the current fiscal and Rs 1,000 crore by next year. Its turnover grew over three-fold at Rs 388.95 crore in 2009-10, as compared with Rs 101.06 crore a year ago.