KOLKATA: SunCoke Energy, a $2 billion company and one of the largest independent producers of metallurgical coal in the US, has targeted India to expand its manufacturing operations outside the Americas. The company closed a deal with Visa Steel on Monday to form Visa SunCoke, a coke making venture in Odisha. The deal marks the first major foreign investment in the domestic coke making industry.

While Visa SunCoke is being created out of Visa's existing coke business, SunCoke is also scouting for acquisitions in India to power its aggressive growth plans. "It is the first time that we have ventured out of the US to tap the merchant market. We believe the timing of our entry into India is right, since coke-making business in India is entering a mature phase. Large and mid-sized steel plants are looking at outsourcing their coke operations to specialised service partners," Micheal J Thomson, President & COO, SunCoke Energy said.

As part of the deal, Visa Steel's coke making operations will be hived off into Visa Coke, a special purpose vehicle in which SunCoke Energy will pick up 49% stake at an investment of $67 million (or Rs 368 crore), while Visa Steel will hold the remaining 51% stake. To start with, the joint venture will comprise Visa's existing 4 lakh tonne per annum heat recovery coke plant and associated steam generation units at Odisha's Kalinganagar. "We chose the joint venture route to hit the ground running. "We are also keen on making some acquisitions to grow our presence in India," Mr Thomson added.

SunCoke produces 6 million tonne of coke from its five US plants located close to customer premises at Vansant , Virginia; East Chicago, Indiana; Haverhill, Ohio; Granite City, Illinois and in Middletown, Ohio. A nother plant at Vitoria in Brazil caters exclusively to needs of world largest steel company, ArcelorMittal. "While Visa will offer local expertise of the market, we hope to offer necessary technology and bring in some of the environment management practices that we follow back in the US," Nelson Garcez, VP (business development), SunCoke Energy said.

Commenting on the deal, Vishal Agarwal, managing director, Visa Steel said: ""This is the first major investment by a foreign coke company in India. The jv will also tap into the opportunity to set up coke plants for steel plants on a build own operate and transfer (BOOT) basis across the country." The two companies will have three members each on the board of Visa SunCoke. While Vishal Agarwal, Vikas Agarwal and P R Bose will represent Visa Steel, Mr Thomson, Mr Garcez and Saurabh Pandey will represent SunCoke Energy. Mr Bose, CEO of Visa's Coke Business has been appointed managing director of the new company.

 

Source : economictimes.indiatimes.com