Kerala Minerals Revives Capacity Addition Plans On Chinese Demand

Kollam, March 23 | Updated: Mar 24 2004, 05:30am hrs
A $10-million supply contract to Chinese company has nudged countrys only rutile-grade titaniumdioxide manufacturer Kerala Minerals and Metals Ltd (KMML) to reopen its Rs 745-crore capacity expansion dossier.

The Ranchi-based MECON, the former Hindustan Steel subsidiary, had handed over a consultancy report on expansion, but KMML had been dilly-dallying on the costly assignment.

From 30,000 tonne a year, the company targets to ramp up its capacity to 60,000 tonne per year and then to 200,000 tonne a year. The expansion will be through by 2005-2006, KMML managing director KP Rajendran told FE. The company has started placing orders on machinery for its output-hiking programme.

It is only a month since the Rs 330-crore Kerala PSU inked an MoU with Shanghai Yingtai International Trading Ltd for shipping an average of 400 mt per month till April 2005. It is a $10-million deal and with every chance of repeat order, says Mr Rajendran. World demand for rutile-grade titaniumdioxide has now hit 4.5 million tonne per year that capacity expansion has become a crying need to sharpen its profitability. From Rs 94.03 crore in 2002-2003, the net profits had improved to Rs 98 crore (provisional) in the current year, but two years back this had even crossed Rs 100-crore mark.

KMML had been busy with de-bottlenecking operations in its plant in Chavara, when the market pressure for stepping up its production took a high pitch. The domestic consumption of rutile-grade titanium dioxide is also up from 20,000 tonne per year in 2002-2003 to 25,000 tonne a year this financial.