Gujarat NRE Coke to harness wind energy to reduce energy bill an rationalize tax payments
(August, 2003)

Calcutta based Gujarat NRE Coke (GNCL), the largest manufacturer of LAM coke in the non-captive segment in the country is taking long strides in its avowed goal in becoming energy and cost efficient. As part of this process, the company today declared its tie-up with Suzlon Energy for setting up a 1.25 MVA windfarm in Gujarat.

The total cost of the project is Rs.55 million. GNCL will contribute approximately 30% of the Project cost, i.e. Rs. 165 lakhs and the balance 70% amounting to Rs.385 lakhs will be financed by a Term loan.

GNCL�s contribution for the windfarm approximately equals the savings in income tax payable this year on the company�s profits which will be exempted in view of higher depreciation benefit available on the windfarm project. As such, the net cash outflow on account of this project is almost negligible. Further, from next year the company will be saving substantially in respect of power & electricity bill against which the out flow of installment and interest will be negligible and as such there would be a substantial saving in the years to come for the Company. The net worth this year would be higher by the amount of tax savings availed due to such project.

Apart from the above, the company will also be eligible for the various sops offered by the Government of Gujarat for companies generating power using non-conventional energy resources.

The windmill is part of NRE Coke�s concerted efforts towards becoming energy efficient, so as to not only reduce wastages, but also reduce the outflow on account of the energy bill. In this context, it can be said that the company is also in the process of initiating steps for the cogeneration of power from the waste heat of its chimneys.

The company is doing exceedingly well in the current year and the steps towards the rationalization of its electricity requirement will add further muscle to its bottomline. The company, which paid a 10 percent dividend and a 1:2 bonus is expected to maintain its EPS at current levels (Rs 6+) on the enhanced equity base.

"NRE stands for Natural Resources and Environment" said Sri Arun Kumar Jagatramka, Managing Director. "Being environment friendly is our stated mission as we use natural resources to generate and maximize the creation of wealth. This windfarm too, is part of this strategy of being not only eco-friendly but also energy efficient and naturally effective.�