NALCO to raise 150 mn euro for expansion

Bhubaneswar, Sep 22: National Aluminium Company Limited (NALCO) has short listed SBI and Axis bank to raise external borrowing to the tune of 150 million Euro to meet the foreign cost component of the ongoing second phase expansion project.

Addressing newsmen here after the Annual General Meeting here yesterday NALCO Chairman C R Pradhan said the company would procure nearly Rs 1500 crores equipment from European countries for which it has to tap the external borrowing.

Mr Pradhan said nine banks and merchant bankers had responded to the NALCO's bid but seven of them had submitted their bids and after careful examination, the Company had short listed the SBI and Axis Bank to raise external borrowing of nearly Rs 900 crores.

The second phase of expansion with an investment of Rs 5300 crores, the Chairman said would be completed by the end of 2008 which would raise the bauxite mine capacity to 63 lakh tonnes and Alumina refinery capacity to 21 lakh tonnes besides the aluminium smelter capacity to 4.60 lakh tonnes.

Mr Pradhan said, besides the Brownfield expansion, the NALCO is also examining some proposals to set up joint venture project overseas for smelter to add value to the surplus alumina to the tune of 12 lakh tonnes once the second phase expansion was completed He further said the company was exploring the possibility of setting up of backward integration projects to ensure steady supply of some of the raw materials and for insulating company from price uncertainties.

Mr Pradhan said the company was perusing with the government for new bauxite mining lease at Gandhamardhan in Orissa and hinted that if the state government recommended the mining in favour of NALCO it would go for another greenfield project. He said the centre has already written to the state government and recommended for the Gandhamardhan bauxite mining adding that NALCO was the first applicant for the lease.

To a question, the NALCO Chairman said so far the company has not finalised and overseas projects as the terms and conditions were not suitable to NALCO.

He, however, hinted that the company was eager to acquire some foreign companies provided the centre cleared the proposal and the projects were profitable to the company.

Mr Pradhan said,''Some companies from Indonesia and Tajikistan had approached the NALCO to take over their Smelter plant which were not able to run because of alumina but we did not find the plants very much feasible for us to take over.'' He claimed that NALCO had achieved the highest ever sales turnover of Rs 6515 crores, highest export earning of Rs 2585 crore and highest ever net profit of Rs 2381 crore.

The company, he said, also approved the highest ever dividend payout of 75 per cent amounting to Rs 483.23 crore.

Mr Pradhan, however, said the appreciation of rupee in the international market has cost NALCO to incur a loss of Rs 120 crore every month since April 2007.

UNI