Monnet to invest Rs 1400 cr in Orissa, Jharkhand

Sponge iron manufacturer Monnet Ispat is planning to invest Rs 1400 crore for setting up sponge iron units in Orissa and Jharkhand.

The company has signed memorandum of understandings (MoUs) with the two state governments for setting up an integrated steel plant and a 250 mw power plant. The project entails a 0.8 million tonne sponge iron capacity and 1 million tonne steel capacity.

Monnet will also invest Rs 630 crore to increase its capacity to 0.8 million tonnes from its current capacity of 0.3 million tonnes. The company is planning to buy iron ore mines to meet its future raw material demand.

"We are investing around Rs 630 crore to expand our sponge iron capacity from 0.3 mt to 0.8 mt and steel capacity from 0.3 to 0.7 mt. The operations will be backed by a 150-MW captive power unit," said Sandeep Jajodia, executive vice-chairman and managing director, of the company.

Elaborating on Monnet's expansion plans, Jajodia said Rs 230 crore would be invested for expanding sponge iron capacity, Rs 300 crore would be invested for setting up a 90-mw power plant and the rest will go towards steel, he said, adding that the expansion was expected to be completed by September 2006.

In Chhattisgarh the company had secured lease for 93 hectares in the Rowghat mines and was awaiting necessary clearances. It has also leased a 78 hectare mine at Hahaladi in Kanker district to meet its raw material demand at Raipur and Raigarh.

"We are also talking to some private miners to acquire mines," he said, adding that this phase of expansion would be funded mostly by debt.

The company had reported a 372 per cent increase in its net profit at Rs 36.12 crore for the fourth quarter ended March 31, 2005. Its turnover had jumped by 60 per cent to Rs 234.64 crore.

The company recorded a 337 per cent jump in its net profit to Rs 123.83 crore for the financial year ended March 31, 2005.

Monnet's turnover jumped by 152 per cent to Rs 777.77 crore in 2004-05 as compared with a turnover of Rs 309.59 crore in 2003-04. Sales during the year more than doubled partly due to higher volumes and near doubling of price.

Company executives, however, added that close to 35 per cent of the year's sales came from Monnet Power, that was merged with Monnet Ispat in June 2004.