Sterlite to invest $400m to
hike HZL capacity
RAKHI MAZUMDAR & SUMAN DAS SARMA
TIMES NEWS NETWORK [ FRIDAY, DECEMBER 19, 2003 12:47:33 AM ]

KOLKATA: The Sterlite group of companies has firmed up plans to invest around $400m out of the proceeds of Vedanta’s recent $1bn IPO to increase Hindustan Zinc’s smelter capacity by 75% to 4 lakh tonnes per annum.

This investment will also include a 150-MW captive power plant at Chanderiya and a 120% expansion in its lead manufacturing capacity to 80,000 tonnes. HZL’s expansion will be complete by March ’05.

Our decision to increase smelter capacity at our unit, despite existing idle capacity in Europe and US, is aimed at taking advantage of the strong and growing metal demand in Asian markets, Kishor Kumar, vice president (marketing), HZL, said. For example, China alone consumed 18% of the world’s refined zinc last year, with the rest of Asia making up another 27% of demand. Compared to this, western Europe and North America comprised 25% and 18% of demand respectively.

The group’s aggressive plans to emerge as a leading player in the global metals sector include achieving capacity to produce half million tonne per annum each of copper, aluminium and zinc, and raise the production of gold to half million ounces annually, over the next 2-3 years. With this, Sterlite group is eyeing doubling its turnover from $1.6bn at present, to around $3bn by ’05.

In line with its aim, around $800m has been earmarked for Balco’s expansion programme that is set to increase its metal capacity from 1.5 lakh tonne to 5 lakh tonnes of aluminium by March ’06.

Another $80m is being spent on its mainstay business of copper. The group is in the process of doubling its copper manufacturing capacity at Tuticorin from 1.5 lakh tonnes to 3 lakh tonnes by March ’04. Also on the cards is a $50m project to expand its gold manufacturing capacity to 0.5m ounces by ’05.