Gujarat NRE move

Calcutta, Jan. 2: Gujarat NRE Coke Ltd (GNCL) has converted debt worth Rs 235.9 crore into equity to shore up its balance sheet but accelerated dumping of metallurgical coke by Chinese players may undermine the effort of the beleaguered firm.

GNCL, one of the largest manufacturers of coke in the non-captive sector, is operating at only one-fifth of its installed capacity as it finds it tough to compete against cheap Chinese import.

As of now, the company has Rs 3,500 crore debt on its books and plans to bring it down to Rs 2,700 crore by March this year.

"Managing large debt is not a problem if the industry is doing well. But undercutting by Chinese players is making things tough," Arun K Jagatramka, promoter of the company, said.

Manufacturers of coke, used by the steel industry, have been lobbying the government to impose anti-dumping duty on Chinese players but a decision has eluded them so far.

Chinese coke is coming to India at $110 a tonne compared with the domestic price of $140 a tonne.

According to Jagatramka, India will import around 3 million tonnes of met coke this year. More than the volume, the price is wreaking havoc, industry observers said, as local players were forced to match.

India has around 10 million tonnes of installed capacity in the merchant sector but only 2.5 million tonnes of met coke is being actually produced.