Indo Gulf Corporation, the Rs 638 crore Aditya Birla group company, has targeted a turnover of over Rs 2,375 crore from Birla Copper, its copper unit by the year 2001-02, said B N Puranmalka, managing director of the company on Friday at their copper unit located at Dahej in Bharuch district, Gujarat.
Apart from its fertilizer business the company expects copper to be the main revenue generator as there is a demand-supply gap of two lakh tonnes and a high entry barrier to set up new units. On future projections, Puranmalka said, the company's total turnover would be Rs 3,449 crore by the year 2001-02, with its urea sales and fertilizer trading generating only Rs 992 crore.
The copper unit has currently an installed capacity of one lakh tonne copper per year. The smelter unit was commissioned in May 1998 and is currently operating at 50 per cent capacity utilisation, a cash-break-even level for the unit. They expect to achieve 100 per cent capacity utilisation by the end of the current fiscal. The total project outlay is Rs 1,850 crore with a debt-equity ratio of 1.7:1 of which Rs 1,682 crore has already been utilised.
More From This Section
The company expects to commission its phosphoric acid plant and a 35mw captive power plant by this month end. A jetty is being set up to handle the imported raw materials, which is expected to be operational by this year. The company has spent around Rs 160 crore, which is nearly 10 per cent of the total project cost, adhering to stringent pollution norms.
The company expects to increase its unit capacity to 1.5 lakh tonnes per annum by the year 2000-01 with an additional investment of Rs 360 crore. The expansion will be funded from debt and internal accruals. The company does not expect to rise equity in the near future and the total paid-up capital after FCD conversion is expected not to exceed a level of Rs 234 crore.
Its interest burden is expected to come down drastically by swapping some of its foreign currency loans by which the average cost of borrowing will be close to 13.82 per cent per annum.
Currently, the company is selling sulphuric acid generated through smelter acid and once the phosphoric acid plant is commissioned, more than 80 per cent will be used captively. The company has already tied up consumers for phosphoric acid with some fertiliser manufacturers. Indo Gulf plans to tie-up with players like Rashtriya Chemicals & Fertilisers to set up a DAP plant.
In February 1998, Birla Copper had commissioned its forward integration project to manufacture continuous caster rods.