Surana to take 49% in Malaysian coal JV
Steel manufacturer Surana Industries will form a joint venture with Malaysia-based Agate Group for mining coal in Indonesia.
By TNN |
CHENNAI: Steel manufacturer Surana Industries will form a joint venture with Malaysia-based Agate Group for mining coal in Indonesia. By 2010, Surana Industries proposes to boost total production capacity to 1 million tonne (MT), from its current capacity of 0.2 MT.
The Rs 2,500-crore Surana group company will pick up 49% stake in the joint venture company for Rs 40 crore, Surana Industries’ managing director Dinesh Surana said on Wednesday.
The joint venture company, PT Agate Resources, will be managed by Surana Industries and the $15 million Agate, which is engaged in duty-free retail, commodity trading, IT, pharma and mining-related activities. Agate has the right
to exploit the coal mines in Indonesia.
The infusion of fresh equity would augment the capital base and Mr Surana sees it as an investment in the Indonesian company. “We shall be allocating our equity shares. The total number of shares allotted will be eight lakh at the rate of Rs 500 per share,” he added.
Stating that the average cost of coal would be around Rs 2,800 per tonne against the current market price of Rs 4,000, he said the company was able to save Rs 60 crore through the joint venture, as it would consume five lakh tonnes of coal.
The first coal consignment is expected to reach the plant in six months time. A railway siding is under construction at Raichur, for which the company has procured land, he added.
Mr Surana said the integrated complex would have a sponge iron plant to manufacture 1.28 lakh tonnes of steel, a steel melting shop to produce 2.25 lakh tonnes and a rolling mill to produce 2 lakh tonnes of steel (all per annum).
A captive power plant to generate 35 MW of power would also come up at the plant, which is slated to go on-stream by March 2008, he added.
Last year, Surana’s net profit was Rs 30 crore on a turnover of Rs 780 crore.
The Rs 2,500-crore Surana group company will pick up 49% stake in the joint venture company for Rs 40 crore, Surana Industries’ managing director Dinesh Surana said on Wednesday.
The joint venture company, PT Agate Resources, will be managed by Surana Industries and the $15 million Agate, which is engaged in duty-free retail, commodity trading, IT, pharma and mining-related activities. Agate has the right
to exploit the coal mines in Indonesia.
The infusion of fresh equity would augment the capital base and Mr Surana sees it as an investment in the Indonesian company. “We shall be allocating our equity shares. The total number of shares allotted will be eight lakh at the rate of Rs 500 per share,” he added.
Stating that the average cost of coal would be around Rs 2,800 per tonne against the current market price of Rs 4,000, he said the company was able to save Rs 60 crore through the joint venture, as it would consume five lakh tonnes of coal.
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The coal will land at Chennai from an Indonesian port and will then be transported to Raichur in Karnataka, where Surana’s Rs 473 crore integrated steel complex is coming up, he said.The first coal consignment is expected to reach the plant in six months time. A railway siding is under construction at Raichur, for which the company has procured land, he added.
Mr Surana said the integrated complex would have a sponge iron plant to manufacture 1.28 lakh tonnes of steel, a steel melting shop to produce 2.25 lakh tonnes and a rolling mill to produce 2 lakh tonnes of steel (all per annum).
A captive power plant to generate 35 MW of power would also come up at the plant, which is slated to go on-stream by March 2008, he added.
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Mr Surana said the board approvals had been obtained for the second phase activity that would involve raising over Rs 1,500 crore. Last year, Surana’s net profit was Rs 30 crore on a turnover of Rs 780 crore.
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