Puranmalka said the company has projected a turnover of Rs 1,625 crore for the current financial year, against Rs 638 crore in 1997-98.

Indo Gulf's urea production is likely to touch the one million tonne mark in the current fiscal, Puranmalka said. While profitability will continue to be driven by the fertiliser business, revenue will be higher in copper. At present, the company's Jagdishpur urea plant in Uttar Pradesh running at over 120 per cent capacity produces 9.33 lakh tonnes of urea. Indo Gulf is looking at further upgrading its capacity this year by deploying a better technology for urea. Indo-Gulf's one lakh tpa copper smelter unit, under the Birla Copper division, wascommissioned in May 1998. Up to July this year, Indo Gulf has spent close to Rs 1,700 crore on the copper project.

A 35mw power plant will go on stream by the end of the month, while a jetty (set up at a cost of Rs 240 crore) with a handling capacity of 2.5 lakh tonne will be operational by December this year. The jetty will be used to import copper concentrate, coal and rock phosphate. The company is looking at supplying imports to other companies through the jetty which has a 50 per cent spare capacity apart from the captive use.

The copper smelter project has achieved 50 per cent capacity utilisation and is slated to touch 60 per cent within a month, senior company officials said. The project is slated to achieve a capacity utilisation of around 85 per cent to 90 per cent by March 1999, they added. The total production by the end of August will be 10,000 tonnes of CC rods. Puranmalka said the total capacity build up in the first three months of operation has been above expectations and comparesfavourably with other plants world over. The company has already tied up the required finances for the project. The debt-equity ratio for the project is 1.7:1. The plant's capacity will be enhanced further to 1.5 lakh tpa by 2000. Indo Gulf will fund the enhanced capacity through debt and internal accruals. It has no plans to come out with a public issue, a senior director said. The company hopes to maintain the debt-equity ratio at 1.7:1.

The company has entered into five-year contracts for copper concentrate from countries like Indonesia, Malaysia and Chile. The contracts will also insulate its working from fluctuating spot TCRC. "We will be insulated from fluctuating world copper prices because the prices of both the raw material and the finished goods are linked to the price on the London Metal Exchange (LME)," Puranmalka said. The government's decision to allow hedging operations shortly, will benefit Indo-Gulf and the company is all set to get into that mould, he said. Pricing mechanism of rawmaterials will thus have a built-in hedge.

The margin drivers for the company were conversion charges on raw material, good premia on finished goods over LME prices, duty differential between raw material and finished copper, and revenue from conversion of smelter acid to phosphoric acid, he said. Conversion charges contribute nearly 40 per cent to the earnings. While the company plans to manufacture phosphoric acid from sulphuric acid, a by product, other by-products like phospho gypsum will be marketed to cement companies and for agro use. It is yet to decide on the proposed diammonium phosphate venture with Rashtriya Chemicals & Fertilisers.