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At Gujarat NRE Coke, we understand that we can protect and strengthen our leading industry position only if we embark on business-strengthening strategies and project implementation faster than the competition.
In line with this, the company embarked on a number of initiatives:
Aggressive, as opposed to usual capacity expansion in proactive anticipation of growing customer needs.
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Multi-location dispersal of manufacturing capacity, closer to customers.
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Believing in economy of scale, which provides the company with operating economies, which not only help in amortising overhead costs across a larger production volume, but also help in maximizing profitability during industry peaks.
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First-time foray by any Indian coke manufacturer in the international market when consuming nations are seeking a secondary coke supply source.
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Pioneering in acquisition of coking coal mines by an Indian coke producer.
As a result, the company has facilitated India establish herself on the global map for merchant coke supplies.
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At Gujarat NRE Coke, we are convinced that a low cost structure represents the best insurance against industry cyclicality.
The company created a significant foundation for sustainable long-term profitability through a low capital cost per tonne when it went into production in 1995. Thereafter, it reinforced this advantage with each subsequent expansions till date.
Consequently, the company's capital cost per tonne declined with every subsequent expansion; The coke division has a cumulative gross block of Rs.322.32 crores at capital cost per tonne of Rs.4726.10 . It has long term associations with its suppliers and clients which help in de-risking against sharp price variations.
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At Gujarat NRE Coke, we hold the opinion that in a volatile raw material environment, business stability can only be achieved through backward/forward integration.
In view of this, the company successfully concluded the landmark ownership of a coking coalmine ‘NRE No.1 Colliery’ in Australia in late 2004. In July 2005 it acquired the coal mining leases of another colliery, the NRE Avondale Colliery, and subsequently the Elouera colliery in 2007 (both consolidated as Wongawilli colliery) in proximity to its first mine. These captive ownerships, the first such instance for the Indian coke industry - represents a significant de-risking against erratic supply and pricing, protecting the company and customer interests.
Further, it has acquired a stake in Zelos Resource, NL, an Australian mining company, having exploration license in iron ore and other base metals like nickel and zinc. It has also made strategic investments in Resource Pacific Holdings Limited, Rey Recources Limited and New Zealand based Pike River Coal Limited, strengthening its position in the Australian coal sector.
To cash in on the opportunities arising out of a booming steel industry and to gain an insight into the sector, the Company has embarked on the production of rolled and alloy steel products in 2005 with installed capacity of 0.311 million tonne per annum unit in Bhachau, Gujarat.
The company has fully transformed itself to a vertically integrated global resource company from operations in mining to coke production to steel plant, as well as having captive power genartion facilty.
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At Gujarat NRE Coke, we recognize that no company can claim to be truly competitive or successful unless its market leadership extends from a limited region to across the global playing field.
In view of this, the company made two significant global-integrating initiatives during 2004: the successful ownership of a coalmine in Australia and the first-time exports made by any coke producer from India. The company leveraged its port-based location to report Rs 33.47 crores of exports to Brazil in 2003-04, being followed by dispatches to South Africa. In addition to repeat orders from these countries, the company also exports coke consignment to European countries, taking the cumulative coke exports to over Rs.248.43 cr by 2007-08.
The growing export exposure will be as timely as it will be critical: from a macro perspective, it will help the company plug the growing supply gap created by China’s restriction on coke exports; on a micro-level, it will enable the company to achieve high asset utilization and a payback on its investment quicker than anticipated.
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At Gujarat NRE Coke, we understand that we can strengthen our business by strengthening that of our customers in a meaningful way.
To enhance customer value, the company implemented the following initiatives:
Introduction of long term contracts to protect customers from sharp price variations.
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Increasing focus on quicker dispatch cycles, enabling customers to hold smaller inventories.
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Customized product quality to specific customer needs.
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Progressive capacity increase, timed with the growing needs of customers.
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Multi-locational presence in proximity to a diverse set of customers.
As a result, the company now services the ongoing requirements of a number of brand-enhancing corporates.
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At Gujarat NRE Coke, we appreciate the reality that an increasing number of consumers will require growing volumes of the highest grades, requiring us to benchmark our capability in line with the best standards in the world.
In view of this, the company:
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Purchases only the best quality raw material.
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Has continuously improved its coke oven design.
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Introduced improved manufacturing techniques like stamp charging, pre-crushing among others.
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Extended quality control from an individual centric to an institutionalized system.
Over the years, these initiatives strengthened the company’s brand and resulted in an overflowing order book.
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At
Gujarat NRE Coke, we acknowledge the reality that
an optimal financial structure not only serves as a buffer against industry troughs but also provides a launching pad to capitalize on business-enhancing opportunities with speed.
In view of this the company has prudently selected to grow business by progressive repayment of debt and maintaining a low leverage structure. The company also keeps on negotiating the cost of debt. As a result of this financial conservatism, the company enjoys a comfortable interest cover.
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At Gujarat NRE Coke, we worship the thinking that a business must first be environmentally sustainable for it to remain economically viable.
In this regard, the company has made proactive investments in environment protecting initiatives of the following nature:
Improved design: The common flue system ensures practically complete combustion of all volatile hydrocarbons, leaving a clean, hot gas, which can be utilized for generation of power through waste heat recovery boiler.
Power generation: Investment in Wind Turbine Generators having an aggregate capacity of 87.5 MW for a clean form of renewable energy, saving precious fossil fuel. Captive power generation of 60MW capacity under commission, using waste heat emanating from the coke making process.
As a result, the company enjoys a clean environment record and has received the Greentech Safety Silver Award in recognition of our environment management initiatives in June 2003. The company is also eligible to be a beneficiary of Carbon Credit under Kyoto Protocol Agreement.
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