Rain Commodities has begun construction of a waste heat recovery plant in Louisiana state in the US, which is expected to be operational by December 2012, while plans for a second plant in Illinois has been delayed, a top official said on Tuesday.
"We are setting up two waste heat recovery plants at our existing CPC plants in the US, of which one has been zeroed down and the construction is in progress," Vice President, finance, T Srinivasa Rao, said
"The plant will commence operations by December 2012 and we will be spending about USD 35 million for that project in the current year," he said.
Rain Commodities, which makes cement, calcined petroleum coke (CPC) and power and follows a Jan-Dec fiscal, has earmarked an additional USD 25-30 million in 2012 for the plant .
Waste heat recovery is a process by which heat generated during production of raw materials like CPC (used by aluminium industry) is converted into energy.
However, the second similar plant might be delayed to the beginning of the next year due to an approvals delay, Rao said.
Earnings boost
The company's earnings got a boost from a recovery of demand from the aluminium industry that is expected to grow at an average of 7% to 8% per annum in the next 5 years, Rao said.
Rain Commodities' standalone net profit for Jan-March surged to 260.9 million rupees, as against Rs 3.12 crore posted a year ago.
"There is a strong recovery in demand for our products from the aluminium industry, which is a predominant end-user for us, and the demand is continuously growing," Rao said.
The company's consolidated net debt as on March 31 was at USD 588 million and it has scheduled repayment of about USD 22 million by December 31.
Rain Commodities is also looking at listing its CPC business in the US, contributes 80% to 85% to the firm's revenues and operating margins.
"We recently completed our internal corporate restructuring, which gives us flexibility to list our CPC business in the US," he said.
"In our CPC business, we should be able to make an average EBITDA of USD 80-100 per tonne on a long term sustainable basis, if the same industry conditions prevail."
The company's cement manufacturing capacity, undertaken by its unit Rain Cements, rose to 3.5 million metric tonnes from 3.1 million metric tonnes due to debottlenecking of capacity.
The company, which had raised USD 400 million through bonds in December 2010, has no immediate fund raising plans.
At 12.54 pm, shares of the company were trading up 4.08% at Rs 185.75 in a weak Mumbai market.
