Goa Carbon to set up CPC mfg plant

Mumbai: Goa Carbon, a group company of Rs 1,800-crore Dempo Group, has lined up an investment of Rs 700 crore to set up a Calcium Petroleum Coke (CPC) manufacturing plant, augment capacity by 1 lakh tonnes to 2.25 lakh tonnes (lt) at its Paradip unit in Orissa and venture into co-power generation of 18 MW at its three units in Bilaspur, Paradip and Goa.

Currently, the company has a total CPC capacity of 2.40 lakh tonnes at three plants.

Mr Shrinivas V. Dempo, Chairman, Goa Carbon, said the new CPC plant will have a capacity of 3.5 lt to 5 lt with a 50 MW power plant and will come up in the East Coast, mostly in Orissa, with an investment Rs 500 crore. The investment for cogen plants in three units will cost Rs 200 crore. Raising fund should not be a problem as the company is almost debt free, he added.

The demand for CPC is on the rise from robust aluminium manufacturing companies which consumes about 70 per cent of the total production.

Tracking the crude oil, prices of raw petroleum coke, the main raw material for CPC, have gone up from $300 a tonne to $410 a tonne last year exerting pressure on the margins.

“We have managed to pass on the rise in raw material cost to end users. Realisation was the highest in June at $740 a tonne and hope to realise an average price of $580 to $600 a tonne in fiscal 2009,” Mr Dempo said.

Dempo Group is in talks with private equity investor to offload 30-40 per cent stake in its mining venture V.S. Dempo & Co.

Refusing to reveal details on valuations, Mr Dempo said, “we have zeroed in on 5-6 investors and the deal will be finalised by December. In fact, we are planning to hive off mining business into a separate entity”.

On the delay in commissioning the proposed steel plant in Jharkhand, Mr Dempo said: “We have signed deals to acquire 50 acres of land near Manoharpur and waiting for the State Government to finalise its policy on rehabilitation.”

The company had signed a memorandum of understanding with the Jharkhand Government to set up Rs 2,000-crore steel plant in 2006 and start production by 2008. It is also scouting for an one million tonne mining ore in Jharkhand.