Metals and mining giant vedanta will spend around USD 300-400 million in recently acquired Electrosteel Steels to expand its capability to 2.5 million tonnes each year (mtpa), a prime company official aforementioned. This investment will be a part of the company’s overall USD 8-billion (about Rs 56,000 crore) capex plan over the next 3 years, according to vedanta chairman Navin Agarwal.
“Electrosteel Steels is presently processing at a full capability of 1.5 mtpa, and we will before long begin work to expand capability to 2.5 mtpa at a very nominal capex of USD 300-400 million,” Agarwal told reporters on the sideline of the firm’s annual general meeting (AGM) today.
In March, vedanta acquired assets of Electrosteel Steels, which marked its entry into steelmaking in India.
“Our acquisition of Electrosteel has a lot to do with the combination of our iron ore business,” said Agarwal.
Replying to a query on the firm’s troubled copper smelter at Tuticorin in Tamil Nadu, Agarwal said, “At now our endeavour is to restart the copper smelter and discussion of expanding will happen afterwards.”
The Tuticorin plant has been closed since could after 13 people were killed in a police firing during protests against the plant on allegations of it causing health and environmental issues.
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Meanwhile, the company has chalked out a mega capital expenditure plans of USD eight billion over the next 3 years on growth projects across its businesses. The company is observing at growing its oil and gas business to about 400,000 barrels per day, from the current 200,000 barrels per day.
Similarly, the zinc business will grow to about 1.35 mtpa. the company is additionally observing at growing its international zinc business and aluminium and alumina refinery capacities, the chairman said.
“We will be spending USD 8 billion across all our businesses. Most of this capex are going to be funded through internal accruals as our cash flows stood at Rs 7,900 crore (as on March 31) and we have reduced our gross debt by Rs 8,500 crore,” Agarwal said, adding the company won't opt for external funding. Following this expansion, he believes that the firm’s business size will grow by around 50 per cent.
Replying to a query on inorganic growth, Agarwal said, “We have nothing on the plate on the acquisition side, however if a good chance comes, that is synergic to our business, we'll consider it.” Vedanta had posted 2.13 per cent year-on-year rise in consolidated net to Rs 1,533 crore in june quarter, while its total income increased to Rs 22,624 core.
The company’s shares ended 4.26 per cent up at Rs 223.95 apiece on the bse these days, against 0.22 per cent decline in the benchmark.
Soure: In Order Expand Electrosteel Capacity, Vedanta to Invest $300-400 Million
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