Monnet Global (MGL), a 100% subsidiary of Monnet Ispat & Energy, has completed the acquisition of Indonesian Coal Company ? PT Sarwa Sembada Karya Bumi, for $24 million in the Jambi province of Sumatra, Indonesia. In an interview with FE?s Rajat Guha, the company?s executive VC and MD Sandeep Jajodia explains about the benefits of the deal and also the future growth trajectory of various business interests of Monnet Group.
Please throw some light on the size of the coal mine and how it would benefit your company in the long term?
The acquisition gives us access to coal mine spread over an area of 25,000 hectares. Currently, only 1,500 hectares out of the entire area have been explored and the company has been able to establish 65 million tonne of coal reserves in the mine and expects these reserves to go up substantially after completing exploration of the total land area. The coal will be used for captive needs and also the surplus will be sold in the open market which will be a long term source of revenue for the company. There is a huge demand for imported coal from power utilities in India. We think we could do a great business in India by selling coal from Indonesia. Apart from India, we hope to meet some of the coal demand in China and Vietnam through our Indonesian coal venture.
What?s the war-chest that you have set aside for your global acquisitions? Which all countries are you looking at target destination for coal mines?
We are currently looking at prospective coal mines in countries like Namibia, Botswana, Mozambique among other African countries. For this, we have a dedicated office in Johannesburg. Through our Dubai office, we are looking at buying mid-segment steel companies in the Middle East.As for Jakarta, we are now in the process of creating a company. We would shortly hire a CEO and a team of professionals for overseeing our Indonesian assets and further acquisitions in the country.
Please shed some light on the growth ahead for your power business.
Under our power business Monnet Power, we have a 1700 mw power plant in Orrisa and an upcoming 1320 mw plant in Andhra Pradesh. We hope to come out with an IPO in the first quarter of 2012.The process would start from September this year. At this moment, we are not in a position to comment on the IPO size. But, we would surely not want to raise more money than what we need for our power business.
What are your plans for increasing your steel capacity?
We are setting up a 1.5 million tonne steel plant in Raigarh, which would be completed by June, 2012. With this our, capacity will increase and topline will go up thrice in the steel business. After the start of production, we will also make entry into flat steel products for diversification of our steel business.