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| Mercator Lines mulls $500-million capex plan |
| Press Trust of India / Mumbai Sep 07, 2010, 21:15 IST |
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Mercator Lines has drawn up a $500-million capex plan for expansion in coal sector and offshore activities, subject to contracts it receives, a top executive said today.
"We plans to invest $500 million in expansion of coal mines and offshore activities, subject to contracts which we are expecting in the current year," Mercator Lines Executive Chairman H K Mittal told PTI on the sidelines of company's annual general meeting (AGM) here.
The company is looking at acquiring coal mines in Indonesia, he said, adding the projects will be financed through internal accruals and debt. It already has coal mines in Indonesia and Mozambique.
Mittal told shareholders that the company is geared to take full advantage of the expected rise in thermal coal demand to 200 million tonnes per annum over the next five years from the existing 50 million tonnes.
He said that to cater to such a huge growth in coal imports and facilitate movement of larger size bulk carriers into the ports, large port development projects will need to be executed.
This will require both capital and maintenance dredging works and the company plans supplementing its dredging fleet in the next few years, he added.
Recently, it completed the maintenance dredging works for the Indian Navy. The firm is confident of winning large dredging works in India which are due to be awarded within this year, Mittal said.
The company has reported an eight-fold increase in revenues from the non-shipping businesses in Q1 FY11. Contribution of shipping business in the turnover for Q1 of current fiscal stands at 51 per cent.
Mittal said, "Even though we have strategic fleet expansion plans, the company will see revenues rising from non-shipping business verticals and this may be as high as 70 per cent of the group's annual turnover.
"The dry bulk segment continued to remain volatile throughout the last fiscal. For the coming years, we foresee huge demand in dry bulk segment due to jump in demand of commissioning number of coal-based power projects in India."
As for the tanker segment, he said it was reeling under the economic slowdown with a few spikes in FY10, however, with the onset of winter season the fuel demand is likely to grow and will provide the much required impetus.
The company is bullish on offshore oil drilling. "We have commenced preliminary works at the Cambay oil blocks which the company has won in NELP VII," Mittal said.
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