December 1, 2008

Ennore Coke plans Rs 1,000-cr project

Chennai, Nov. 27: Ennore Coke Ltd, whose 130,000-tonne coke plant at Haldia began operations just a few months ago, is preparing a plan to put up a 1 million-tonne plant that may require over Rs 1,000-crore of investments.

Ennore Coke, listed on the BSE, is an associate company of Shriram EPC Ltd, part of the Chennai-based Shriram group, which has a 32 per cent stake in the company. It produces coke, used in the conversion of ores into metals, from coking coal that comes from mines. Coke is a key raw material in steel production.

Mr T. Shivaraman, Managing Director, Shriram EPC, told Business Line that to put up the project, it is imperative to either have possession of coking coal mines or have a company that has the mines as a partner. Depending upon how things pan out, the new project may be put up either by Ennore Coke itself or through a joint venture, he said.

Today, Ennore Coke has 410,000 tonnes of capacity under its command, half of which is through an arrangement with a company called Durgapur Projects Ltd. Ennore Coke outsources coke manufacture to Durgapur Projects. In addition, Ennore Coke recently acquired an 80,000 tonne coke plant from Wellman Incandescent, in West Bengal, for a consideration of Rs 30 crore.
The rest of the capacity comes from the newly commissioned plant at Haldia that has a 12 MW thermal power plant that produces power from waste heat from the coke plant.

The current year is the company’s first full year of operations. For the half year ended September 30, Ennore Coke achieved a turnover of Rs 20 crore and made a net profit of Rs 22 lakh.

The current price of coke is about $500 a tonne. Assuming prices remain unchanged and capacity utilisation is full, Ennore Coke could potentially achieve a turnover of Rs 900 crore in 2009-10.

Asked if work on the proposed 1 million-tonne project could begin at least by 2010-11, Mr Shivaraman said, “we are pushing for starting the next year itself.”

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