October 12, 2008

Adhunik to invest INR 422 crore to enhance production

Adhunik Metaliks Limited has unveiled details of the third phase of investment at its integrated steel plant located at Kuarmunda near Rourkela in Orissa. As per report, Adhunik will spend INR 422 crore over 17 months to increase production of key inputs for steel making and grow profits.

Phase III of the project envisages backward and forward integration projects. These include

1. Increasing sponge iron production from 0.15 million tonnes to 0.315 million tonnes

2. To set up a 17 MW capacity captive power plant

3. Ferroalloy plant of 19,300 tonnes capacity would be set up to augment the existing 40,000 tonnes capacity

4. A lime calcination plant of 56,000 tonne capacity would also be set up.

5. It will also set up railway connectivity to transport key inputs to the plant site.

Mr Manoj Kumar Agarwal director of Adhunik Metaliks said that Phase II of the project has already been implemented at an investment of INR 437 crore and it’s alloy steel and stainless steel manufacturing capacity has gone up from 0.25 million tonnes per annum to 4.5 million tonnes per annum. The first phase of the project was earlier implemented at a capital cost of INR 250 crore.

Mr Agarwal said that "The project will halve raw material costs and increase operating margins to 26% from 18% now, helping profits to grow."

As per report, Adhunik has tied up with banks and financial institutions for raising INR 274 crore as term loan for the project. INR 148 crore will be financed through internal accruals and equity.

In 2006-07, Adhunik Metaliks reported a net profit of INR 77.4 crore on sales of INR 811 crore. It is aiming at INR 1100 crore in sales in 2007-08.