Companias

JINDAL VIJAYNAGAR STEEL

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During 2004-05, JVSL witnessed robust financial performance. Its net sales recorded a substantial growth of 104 per cent over 2003-04 to reach Rs 6,679 crore while net profit surged 64 per cent to Rs 870 crore. The total forex earnings accounted for around 43 per cent of the net sales generated largely from sale of pellets, slabs, HR coils and galvanised products. Out of the total sales revenue, HR coils accounted for 44 per cent, galvanised products contributed 38 per cent, other products 10 per cent, pellets 6 per cent and cold rolled (CR) coils 2 per cent.

The same year JVSL undertook various modernisation projects. It expanded the pellet plant capacity from 3 million tonnes per annum (mtpa) to 4.2 mtpa. The company commissioned a new galvanising line with a capacity of 35,000 tpa for manufacturing ultra-thin gauge galvanised line products at Tarapur. JVSL commissioned a blast furnace plant with an installed capacity of 0.9 mtpa under an Operations and Maintenance (O&M) agreement with Euro Ikon Iron and Steel.

In May 2005, JVSL merged three private companies, namely, Euro Ikon Iron and Steel, Euro Coke and Energy and JSW Power. The company acquired assets of Rs 1,020 crore by this merger. Last September, JVSL changed its name to JSW Steel. JSW is currently in the process of merging Jindal Iron and Steel Company and Jindal South West Holdings with itself.

In the current year, JSW has signed a contract with Siemens VAI (Voest-Alpine Industrieanlagenbau) Austria, for setting up India’s largest blast furnace plant with a capacity of 2.8 mtpa at the company’s Vijaynagar factory in Karnataka. The company has plans of expanding its steel making capacity to 3.8 mtpa by March 2006 and 7 mtpa by 2008 from its existing capacity of 2.5 mtpa. The Jharkhand government and JSW have signed a MoU worth Rs 35,000 crore for setting up a steel plant in the state, near Hesalong in Saraikela Kharsawan district near the iron-ore producing regions in Jharkhand. The plant expects to commence operations by 2012 and would generate employment to around 40,000 people. The proposed plant will be built in two phases and will also generate 800 megawatt of thermal power.

JSW plans to raise $ 200 million through an overseas loan issue to finance the company’s expansion plans in Karnataka. The annual plant capacity in Karnataka will be raised to 7 mtpa at an estimated cost of Rs 50 billion. Of the Rs 50 billion requirement, the company will raise Rs 30 billion via domestic loans and the remainder through an overseas loan.

In January 2006, JSW announced a hike in the price of galvanised steel by Rs 1,000 per tonne. This is due to further increase in the input cost, primarily, of zinc, in the international market. The company last increased the price of galvanised steel in October 2005 by Rs 500 per tonne.

During April-December 2005, JSW reported a rise of 2 per cent in net sales over the same period a year ago to Rs 4,596 crore. However, net profit has suffered by 4 per cent to Rs 445 crore owing to increase in the cost of raw materials and other expenditure.

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MANGALORE REFINERY AND PETROCHEMICALS

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In 2004-05, MRPL achieved remarkable financial performance. The entire accumulated losses of Rs 1,184 crore as on March 31, 2003 when ONGC acquired management control of MRPL, were wiped out in just two years. The company’s net sales recorded a significant growth of 62 per cent over 2003-04 to Rs 18,508 crore and net profit galloped by 92 per cent to Rs 879 crore. The same period it processed

Economic and Political Weekly April 1, 2006

The Week’s Companies declined by 29 per cent to Rs 401 crore due

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JVSL MRPL Kesoram Financial Indicators 2004-05 2003-04 2004-05 2003-04 2004-05 2003-04 KESORAM INDUSTRIES

Healthy Performance

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During 2004-05, KIL reported a 9 per cent increase in net sales to Rs 1,421 crore over 2003-04. However, net profit of the company declined by 46 per cent to Rs 33 crore. The company’s forex earnings rose by 8 per cent to Rs 152 crore.

During the year under review, the production of VFY rose by just 0.2 per cent to 7,265 tonnes. The VFY and transparent paper business suffered mainly due to the rising input costs of wood pulp, sulphur and coal prices. The production of spun pipes decreased by 18 per cent to 33,333 metric tonnes (mt); total despatches also reduced by 16 per cent to 34,001 mt. In the company’s cement business both Kesoram Cement and Vasavadatta Cement achieved the highest ever production of cement and clinker since its inception. The production of blended cement launched under the brand name of “Birla Shakti” increased to 48 per cent in 2004-05 from 36 per cent in 2003-04. The gross turnover of Birla Tyres also increased by just 1.6 per cent to Rs 749 crore.

In July 2005 KIL increased its shareholdings in Mangalam Timber Products (MTPL) by acquiring 5 per cent from the Orissa government at Rs 2 crore. Both KIL and MTPL are B K Birla group companies; KIL is the promoter of MTPL. Prior to the acquisition the promoter’s share in MTPL was 23 per cent.

For the first nine months ended December 2005, KIL reported healthy financial performance. Its net sales increased by 8 per cent to Rs 1,357 crore over the same period the previous year and net profit surged by 34 per cent to Rs 17 crore. The sales revenue of tyres segment rose by 11 per cent to Rs 621 crore; rayon, transparent paper and chemicals by 7 per cent to Rs 151 crore while the cement division recorded

Notes: - not available, P/E multiples are the latest with corresponding last year’s figures. a rise by 5 per cent to Rs 508 crore.

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Economic and Political Weekly April 1, 2006