(From left) Vesuvius chairman Saibal Gupta, group president and CEO Gian Carlo Cozzani and managing director Biswadip Gupta in Calcutta on Tuesday. Picture by Kishor Roy Chowdhury

Calcutta, April 12: Encouraged by an upturn in the steel industry, refractory maker Vesuvius India has chalked out a mega expansion plan. The company will follow both the greenfield and the acquisition routes.

It has identified two companies for acquisitions, said Gian Carlo Cozzani, president and CEO of the Vesuvius group.

?We expect to close the deal by the third quarter of this year,? he said. Cozzani did not reveal the names.

The target companies have businesses both in steel and non-steel sectors.

At present, the non-steel portfolio contributes 20 per cent of Vesuvius?s business. The company wants to increase this through an acquisition in the non-steel sector.

Vesuvius is also setting up a new plant close to its Calcutta factory. It is eyeing a 5.5-acre plot that belongs to Calcutta Port Trust and is rooting for a 15-year lease.

?We will raise production in our Calcutta unit by 50 per cent by 2007 and by 100 per cent by 2008. Investment in the first phase here is ?5 million,? Biswadip Gupta, managing director of Vesuvius India, said.

The capacity at the Taratolla Road plant will be doubled.

The company will deploy state-of-the-art technology for the new plant.

It does not see any problem in funding possible acquisitions or greenfield expansion.

?With the support of our parent, funding is not going to be a problem,? Gupta noted.

Saibal Gupta, chairman of Vesuvius India, said the increased capacity would be ready at a time when steel plants across the country would also expand.

The steel industry has announced plans to expand total capacity to 50 million tonnes by 2007. Similar plans are being drawn up by non-ferrous industries, including aluminium, glass and steel.

The Vesuvius group is a world leader in the supply of advanced refractory products and systems to the iron and steel industry. It is also a leading supplier of refractory lining material.

Vesuvius is now focusing on India and China for future growth. The Indian unit started 10 years ago and is now poised for a quantum jump.

However, the company is hoping to transform itself into a total engineering solutions company instead of being limited to products.

The managing director said the company hoped to continue its topline growth in future. Net sales have gone up from Rs 33.54 crore to Rs 42.51 crore in the first quarter of 2005 with a profit of Rs 5.87 crore.

In 2004, Vesuvius recorded net sales of Rs 173.58 crore and a net profit of Rs 24.25 crore.