Monnet Ispat Eyes 5-Fold Rise In Turnover

Monnet Ispat Ltd, flagship of the Rs 400-crore Monnet group, expects its turnover to increase five-fold within the next four years - from Rs 120 crore in 2000-01 to Rs 600 crore by 2005.

During the period, the company expects its profit after tax to increase seven-fold. For the financial year ended 2000-01, Monnet Ispat posted a net profit of Rs 10 crore. By 2005, the company expects its net profit to swell to Rs 75 crore, Sandeep Jajodia, managing director, Monnet Ispat, said.

At present, Monnet Ispat primarily makes semi-finished steel (billets) at its Raipur, Chhatisgarh, facility which is used up by around 60 rolling mills in the region.

Jajodia's optimism arises from the company's expansion plans. The company had recently signed a memorandum of understanding with the Chhatisgarh government to invest Rs 1,200 crore in the state over the next eight years.

These investments will be made in Raipur and Raigarh. The state government is granting Monnet Ispat benefits like sales tax relief for ten years.

According to Jajodia, Monnet Ispat has devised a two-pronged strategy for expansion -- one, to expand the capacity of its sponge iron and steel manufacturing facilities and two, to simultaneously create capacities of power and coal which will add inherent strength to its operations in the long term.

The company will also invest Rs 570 crore in its existing facility at Raipur. It will invest Rs 75 crore in steel billet/ingot facility (3 lakh tonne per annum capacity), Rs 60 crore in a 3 lakh tpa structural rolling mill, Rs 150 crore in a 3 lakh tpa coal-based sponge iron facility, Rs 215 crore in expanding its captive power plant by 55 MW and Rs 70 crore in a smelting furnace for its ferro alloys facility at Raipur.

At Raigarh, the company would invest around Rs 590 crore over the next eight years in a greenfield project. Around Rs 290 crore would go towards a 70 mw power plant, and Rs 150 crore towards setting up a coal-based sponge iron facility (3 lakh tpa). The company is also setting up a steel bar and suction facility (1.5 lakh tpa), steel ingot facility (1.5 lakh tpa) and a coal mining and washery at the cost of Rs 35 crore, Rs 40 crore and Rs 75 crore respectively.

In Raipur, the power project will be completed by September 2002 and the company will start using its own coal mine by 2002 for sponge iron and power generation, Jajodia added.