Varun Inds eyes China, Korea for iron ore exports

One of the largest exporters of stainless steel kitchenware and houseware items in the country, Varun Industries Ltd is eyeing East Asian countries like China and Korea for export of iron ore.

The company is awaiting approval for a mining lease for 102.32 acres of land in Karnataka, apart from entering into a mining contract for another 40 acres land in the state.

Denying chances of entering into supply agreement with major steel companies, Mayur Doshi, General Manager - Finance, Varun Industries said, "We are looking for exports of iron ore from our mines once we get a go-ahead for mining lease application. China and Korea are possible markets for such exports, among other potential markets. However, the valuation of exports cannot be predicted unless the mining actually begins."

The mining business is run by a division of a group company along with diversified businesses like oil and natural gas drilling work, wind mills and agro products. Varun Industries has till now set up four windmills in Jaisalmer, Rajasthan, with a combined capacity of 4.95 Mw.

The company is also in the process of bidding for on-shore oil drilling works for ONGC and Oil India, and is also in talks with a Chinese company for buying oil rigs.

Varun Industries Ltd, which till now used to fully export stainless steel kitchenware, houseware, tableware and other items through a network of around 80 suppliers, is now in the process of manufacturing the products at its new plant in Vasai near Mumbai.

With an installed capacity of 30,000 metric tonnes per annum (MTPA) set up at a project cost of Rs 55 crore, the plant will be supported by a stainless steel sheet re-rolling mill at Jodhpur, Rajasthan as a process of backward integration at a cost of around Rs 29 crore.

According to Kiran Mehta, Chairman and Managing Director of Varun Industries Ltd, the company will also strengthen its brand and set up sales and distribution network in India to foray into the domestic market by supplying around 1500 varieties of its products to various retail chains.

Mehta added that the company is also setting up a showroom in Chennai for wholesalers and semi-wholesalers for better distribution of the products in the domestic market.

To meet its funding requirements, the company is entering the capital market with an initial public offering of 9 million equity shares of a face value of Rs 10 each priced at Rs 60 per equity share.

For the financial year 2006-07, Varun Industries had a turnover of Rs 760.78 crore with exports of Rs 740.03 crore.