Steelmakers taking control of insolvent plants will result in greater capacity utilisation, triggering a “steep” hike in domestic demand of graphite electrodes, according to Ravi Jhunjhunwala, chairman and managing director of HEG Ltd.
“A lot of steel plants have changed hands recently and a lot are likely to change hands in the near future,” Jhunjhunwala told BloombergQuint. “This is likely to increase the demand of graphite electrodes steeply as capacity utilisation or further expansion will happen pretty soon since these plants have now gone to much stronger hands.”
Other Highlights:
Rs 750-Crore Buyback
- The buyback is in lieu of dividend and is in line with the company's 35 percent payout ratio.
- Another dividend on cards in April-May, in consideration of the performance in the first two quarters of the year and projected profitability for the second half.
- Promoter group to participate in the current buyback.
On Capacity Expansion Plans
- The 20,000-tonne annual capacity project to be completed in the next three years and not scheduled to be done in different phases.
- Cost of capacity expansion is Rs 1,200 crore. The plan is to fund it through internal sources.
Raw Material Prices
- The contract for importing needle coke is for six months and we are currently in discussions of prices for the first half of the year 2019.
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