Thaindian News

Kolkata, July 8 (IANS) The National Aluminium Company Ltd (Nalco), a Navaratna PSU, is planning to set up two subsidiaries to run its power and non-aluminium business, a company executive said Friday.

“We have already started diversifying into non-aluminium business. Apart from that, we are setting up power plants to meet our own requirement. It makes sense to hive off the units once we have substantial size,” said Nalco chairman and managing director B.L. Bagara here.

The company has already diversified into power generation and set up a 1,200 MW captive power plant.

“We are actually looking at almost 25 percent of our revenue to come from non-aluminium business in next five years,” Bagra said.

It is also in the process of appointing a consultant for its power business.

Nalco increased its net profit by 31 percent during 2010-11 to Rs.1,069 crore from the previous year’s level of Rs.814 crore. Turnover of the company during the period also went up by 18 percent to Rs.5,959 crore. For 2011-12 it is looking at producing 4.5 lakh tonnes of metal and 20 lakh tonnes of alumina.

“After the global economic slowdown, prices of metals went down and alumina prices recovered after long. We decided to diversify into other minerals and metals at that point of time,” Bagra said.

The board of directors of Nalco has given a nod to picking up 49 percent stake in the proposed nuclear power plant at Kakrapar in Gujarat. The project, involving two 700 MW plants, will involve an investment of Rs.13,000 crore and Nalco’s equity participation will be around Rs.1,700 crore there.

“We will fund it from our internal accrual. As on yesterday we had a cash reserve of Rs.5,400 crore and funding is not a problem for us,” he said. It is also setting up a 50 MW wind power plant at Andhra Pradesh with an investment of Rs.274 crore.

“Once we have a generation of around 2,000 MW apart from the existing 1,200 MW plant, we will form a subsidiary for the power segment,” he said.

According to the Nalco CMD, it makes sense for the company to look for bauxite, uranium and copper mines overseas. While it is scouting for bauxite and uranium mines in Africa, copper mines in Latin America are also on the radar.

“In countries like Guinea and Cameroon there are huge bauxite reserves. Many mining companies are going there, taking lease and holding on to it. It is a time to go and take lease and develop at an opportune time,” Bagra added.