Graphite India to expand electrode capacity

Kolkata: Graphite India Ltd will expand graphite electrode capacity by 10,500 tonnes at a cost of Rs 187.50 crore at its Durgapur plant.

The company, the largest manufacturer of electrodes in the country, currently has a total electrode capacity of 78,000 tonnes — 60,000 tonnes in the country and 18,000 tonnes in Germany.

Mr K.K. Bangur, chairman of the company, that the expansion project would be complete within the next 18 to 24 months. He said internal accruals will largely fund the project. “We may also go in for short-term debts to part-finance the project,” he added.

The company, with a decent cash flow, had sold some surplus property in Bangalore in 2006 for about Rs 100 crore and invested the money in 3-year bonds, which would mature next year. “We do not need to draw on this fund,” he explained.

The chairman also said that the company has no plans to sell any more property. The last round of FCCB conversion has seen the company’s paid-up capital grow to Rs 30.22 crore.

The expansion plan follows a surge in demand from the arc furnace steel sector locally and globally. Graphite India exports around 70 per cent of its production. According to the management, the production of steel in the country is likely to go up by 4 percentage points to 38 per cent by 2010.

“A higher margin and healthy order book situation prompted us to go in for this expansion,” a company source said.

Meanwhile, the company has reported a net profit growth of 37 per cent at Rs 133.66 crore for the year to March 31, 2008. The profit growth in the fourth quarter of 2007-08 has been placed at 42 per cent.

The board has recommended a dividend of Rs 3 on a share of Rs 2 (150 per cent). In the previous fiscal, the company paid a total dividend of Rs 3, including a special dividend of Re 1 per share.