| Ispat Industries’ chairman and managing director Pramod. K. Mittal (centre) with managing director V. K. Mittal (right) and T. P. Subramanian, senior vice-president and company secretary, in Calcutta on Wednesday. Picture by Kishor Roy Chowdhury
Calcutta, Sept. 24: Ispat Industries has set a goal of doubling its turnover in five years from Rs 3,161 crore in 2002-03. It has set its sights on Rs 4,000 crore this year.
The flagship of the Mittals has drawn up a four-pronged strategy that includes a mining foray, a captive power plant, a dedicated port and a phased increase of 1.6 million tonnes to achieve long-term growth. The plan should shave over Rs 1,100 crore from costs.
Talking to the reporters after the company’s 18th annual general meeting here today, company chairman and managing director P. K. Mittal said Rs 890 crore has been set aside to augment capacity from 2 million tonnes to 2.45 million tonnes this financial year.
Over the next few years, Ispat will be in a position to produce 3.6 million tonnes. Two sinter plants, that will help expand capacity, have already been put in place.
Mittal said his company is keen on iron-ore mining, and talks with the Karnataka, Goa and Orissa governments are now under way to take the plan to fruition. “Negotiations with the state governments are still going on and we hope to formalise an agreement this year.”
He refused to say how much will be invested in mining, and ruled out the possibility of setting up a new company that could be the vehicle for its new venture. Ports, which help in handling exports and imports smoothly, are also high on the company’s priority.
More value-added products, like galvanised and coated steel, will be offered to customers. A revival of group firm Ispat Profile will help the producer of hot-rolled, galvanised and coated steel, diversify into long products.
“We are in talks with the financial institutions for a debt restructuring of Ispat Profiles. Once that is done, we may be in a position to restart it,” Mittal said.
Taking corporate restructuring forward, Mittal said the merger with Ispat Metallics is almost through. The move will facilitate sponge-iron and gas procurements, and reduce dependence on power for hot-metal production. At the same time, Rs 300 crore is being invested in a 110-MW plant, whose capacity will be raised later.
To shore up its bottomline, the company has appointed a foreign bank to work on a scheme that will help it repay high-cost foreign loans raised through debentures.
The cost of funds has already fallen 4 per cent after its corporate debt restructuring package was implemented. It will go down further as forex loans are returned.