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GUJARAT
NRE Coke Limited has said that it will maintain its bottomline
in the current quarter despite the coke industry witnessing
a downtrend owing to high input cost and a slide in the metallurgical
(met) coke price in the international market.
�We were prepared for the situation that prevails today and
have been hedging both sales as well as raw material procurement,�
Arun Kumar Jagatramka, the company�s vice chairman and managing
director told ET. He said that though the margins on sales
would decline, the profits will not be affected in absolute
terms.
The Rs 300-crore company hedges about 40% of its raw material
and finished goods. �Though the international prices of coke
is around $200 a tonne, we are exporting at $255 a tonne,�
says Jagatramka. Similarly, in raw material procurement, the
company is buying low-ash coal at last year�s price of about
$60 a tonne as against current coal price of about $125 a
tonne. The decrease in demand of steel in China has resulted
in the current slump in met coke prices. Coke is one of the
main ingredient used in steel making. Gujarat NRE Coke has
registered a sales of Rs 113.8 crore in the June quarter,
up from Rs 83.9 crore during corresponding period last year.
The profit rose to Rs 45.1 crore this quarter from Rs 32.7
crore.
About future plans, Mr Jagatramka said that the company�s
new unit in Kutch is expected to come up by December this
year. �We are expecting to reach one million tonne of met
coke capacity from current capacity of 7 lakh tonnes by the
end of this financial year,� he said.
The company is also in talks with the Kandla Port Trust for
setting up a captive jetty. In addition, the company is targeting
exports worth Rs 200 crore in the current fiscal, up from
Rs 75 crore in the last fiscal. The company�s focus in the
current fiscal will be especially in Latin American countries
like Brazil as well as Italy and South Africa.
Mining in the company�s recent overseas acquisition of an
Australian mine is expected to start from next week. �The
second mine that we have acquired in Australia will be developed
over a period of three years and this will help us in ensuring
a raw material supply on a long-term basis,� Mr Jagatramka
said.
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