NMDC to up focus on domestic sales

Company declares dividend of 35%

The public sector National Mineral Development Corporation Limited (NMDC) plans to continue on its strategy of increased focus on the domestic sector over exports.

This was disclosed by B Ramesh Kumar, chairman and managing director of NMDC, at the annual general meeting (AGM) of NMDC held here on Wednesday.

The AGM announced a dividend of 35 per cent for the year 2003-04 as compared to 30 per cent in 2002-03.

In the last financial year also, there has been an increase in the share of domestic sales of iron ore in NMDC's total sales pie, with the share of exports going down.

The domestic sales of iron ore increased to 66 per cent of the total sales during the last financial year as compared to 58 per cent in the previous year. The exports accounted for 34 per cent of sales in 2003-04 as compared to 42 per cent in 2002-03. Exports are expected to fall further to 30 per cent during the current financial year, he said.

Though the corporation received higher export licences, it has kept the export volumes well below the licensed limit to meet the domestic requirements.

Kumar said that though there was scope for unprecedented growth in the iron ore exports due to the growth in the Chinese market, NMDC had decided not to capitalise on the demand for higher short-term gains and continued to cater to the demands of the long-term customers, both domestic and international.

During 2003-04, NMDC stepped up its production to 179.59 lakh tonnes of iron ore, surpassing the record growth of 169.72 lakh tonnes in the previous year. The total sales grew to 206.64 lakh tonnes from 195.11 lakh tonnes.

As a result, the profit before tax rose by 46.61 per cent from Rs 421 crore to Rs 616 crore. The networth expanded from Rs 1,592 crore to Rs 1,967 crore. The earnings per share (EPS) grew by 38.73 per cent to Rs 32.74 from Rs 23.60.

On the future plans, Kumar said NMDC had embarked on an expansion plan to step up its iron ore production from the existing 18 million tonnes to 30 million tonnes by the year 2009-10.

NMDC had earlier said that it is targeting a 5-10 per cent growth in ore dispatches from Bailadilla mines to meet the increasing demand from local steel units like Visakhapatnam Steel Plant, Hy-grade pellets, Vikram Ispat Industries and Ispat Industries Limited.