Saturday, December 8, 2007

Sesa Goa to invest Rs 10 bn

The Sesa Goa group is investing Rs 10 billion to build up its pig iron production capacity to 1 million tons within the next 2 years. Sesa Industries, a subsidiary company of Sesa Goa, at present produces 0.27 million tons of pig iron, reports Business Line.

The capacity expansion will be through both the greenfield and brownfield routes. While the capacity of its existing facility will be increased, a new unit will also be set up, Tapan Patnaik, general manager of the company`s pig iron plant, said on the sidelines of the seventh Asian Steel Conference.

Vedanta Resources plc acquired, through its subsidiaries, 51% controlling stake in Sesa Goa from Mitsui & Company in April 2007.

The pig iron business of the company posted higher profit of Rs 416 million during 2006-07, an increase of 35%. On commissioning of the hot blast stoves, productivity has gone up and the specific consumption of coke, the costliest raw material, has come down.

The company expects growth in the auto and auto component sector to drive demand for pig iron. The pig iron expansion programme will be funded from the company`s internal accruals. The company has begun negotiations with equipment suppliers.

Shares of the company declined Rs 47.65 , or 1.33% to settle at Rs 3,548.55. The total volume of shares traded was 19,303 at the BSE.(Friday ).

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