HEG to invest Rs 200 cr to hike production capacity

BHOPAL, Mar. 21, 2010 - Graphite electrode manufacturer HEG on Sunday said it will invest over Rs 200 crore on expanding its capacity to 80,000 metric tonnes (MT) per year in the next 18 months.
The company, which is part of the Rs 3,500 crore diversified conglomerate LNJ Bhilwara Group, said the capacity expansion will help increase its revenue by up to Rs 350 crore by 2011-12.
"We will be expanding the capacity of our plant to 80,000 MT per annum at a further investment of Rs 225 crore, which will be funded through internal accruals. It is expected to be completed in next 18 months," Mr Ravi Jhunjhunwala, Chairman and Managing Director, HEG Limited said here.
The company has a plant at Mandideep, Madhya Pradesh, which currently makes 66,000 MT of graphite electrodes a year. Graphite electrodes are used in recycling scrap steel.
HEG has invested Rs 725 crore in the last seven years in upgrading its production capacity and setting up its own captive plants.
"We believe this expansion will not only strengthen our export revenues but will also further aid in economies of scale and improve cost efficiencies," he said.
"It will also further increase our strength in the export market by increasing our revenue by Rs 300 to Rs 350 crore," Mr Jhunjhunwala said.
The company had a turnover of around Rs 1,500 crore last fiscal and 80 per cent of its business comes from the overseas market. It has over 100 customers worldwide, including Arcelor Mittal, ThyssenKrupp Nirosta, Nucor, SAIL and Tata Iron among others.