New Delhi 14th July 2009: Gujarat NRE Coke, India’s largest independent producer of metallurgical coke is also the only one with ownership of expanding deposits of coking coal in Australia. For the year ended March 2009, the company’s turnover rose markedly by nearly 75% to Rs1522.60 crore from Rs872.15 crore during 2008-09. However, because of the global economic meltdown leaving a big impact on the steel industry, Gujarat NRE’s profit after tax fell to Rs107.23 crore from Rs172.88 crore. The company has a strong client base and its coke enjoys user preference for its metallurgical properties.
Arun Kumar Jagatramka, Chairman and Managing Director, Gujarat NRE Coke says, “we operate in a unique industry segment, where it neither has peers, nor are the industry dynamics easily understood. Suffice it to say, the fortunes of the industry, which are closely interlinked with the commodity cycles of coke and steel, are highly volatile. Such volatility ensures that there always will remain a natural entry barrier for small, marginal players. This provides the company with an opportunity to use any downturn to invest in new capacity either through greenfield or brownfield route in line with its long term vision. In the process, the ground is prepared to reap the benefits of the next upturn. Thus the 2008-09 working does not reflect the complete picture, as the actual benefits of the large expansion and integration work in progress will be available in the near future”.
Mr Jagatramka further says that "five years back, our company had a total installed capacity of 0.2 million tonnes as compared to the present 1 million tonnes, and was a standalone coke producer without any stake in coal mines or any other sort of supply security. The company's decision to think ahead and acquire coking coal mines to secure supply of its raw material and the resultant potential therefore is not reflected as the mines are currently in developmental stage and are producing less than one million tonnes of premium quality hard coking coal as opposed to a targeted 7 million tonnes expected in 3-4 years time. The fact that these mines contain more than 500 million tonnes of in situ resource of the world’s best premium quality hard coking coal also does not find place in the current EPS/PE calculations.
High quality hard coking coal is a resource that is globally in short supply. It is a commodity whose availability is limited and demand is projected to grow at an exponential rate. There is already a demand supply mismatch which will become even more pronounced in the years to come. Coal and coke prices are bound to become more and more volatile. Therefore, the company being the first and the only Indian company to own and operate coking coal mines in Australia with secured supplies for the future enjoys a singular benefit which only a few other companies around the world can lay claim to.
About the Company : Gujarat NRE Coke Ltd
Gujarat NRE Coke is the country’s largest independent producer of Low Ash Metallurgical Coke (LAMC) with a track record of regularly rewarding its Investors with dividend and bonus. Further, the Company has also plans to set up a greenfield 1 million tonne coke plant in the Nellore District of Andhra Pradesh. And a further 1 million tonne coke plant in Gujarat besides adding another 0.25 million tonnes at Dharwad over the next 3-5 years. All this will take the total coke making capacity to about 3.5 million tonnes.
Besides the company already has 87.5 MW of wind power operational in Gujarat and has recently announced plans to set up further 200 MW of wind power over next 3-5 years. The Company is already in the process of setting up 60 MW of waste heat recovery co gen power plants, which are expected to be operational in 2010. The company further plans to set up a 200 MW of Thermal Power plant and 120 MW of waste heat recovery power plants over the same timeframe. On completion of these projects, the total power generation capacity would become 667.5 MW.
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