'We are expanding capacity in all our businesses (ports, shipping and oil rigs) by investing around $1.5 billion. We will also implement new business strategies,' V. Ashok, director of Essar Shipping, told reporters here Saturday.
The Rs.2,646-crore firm is planning to target non-Essar group companies for business with a view to increasing the non-group revenue to 60 percent from the current 40 percent.
Ashok said Essar Shipping was investing Rs.2,572 crore in expanding its ports and terminal business.
Once the expansion projects are complete, the capacity of Essar's Vadinar oil terminal in Gujarat will increase to 34 million tonnes per annum from the present 10.5 million tonnes.
The first phase expansion of the Vadinar unit will be ready by 2010-end, while the bulk terminals the company is setting up at Hazira and Salaya ports in Gujarat will be operational in fiscal 2010 and 2012 respectively, he added.
'Financial closure for the Vadinar (first phase) and Salaya projects is expected to be completed by this October,' Ashok said.
Referring its shipping business, the company director said Essar Shipping was adding 12 more vessels to its existing fleet of 25 at an outlay of around $630 million.
The company has already achieved financial closure for the purchase of four supramax dry bulk carriers, costing $218 million. It will add two more supramax dry bulk carriers.
'The company buys the ships only when there is a confirmed long term order. With group companies in steel and oil refinery expanding their operations, the order book position of the company is good,' Ashok said.
He added that the company, operating deep water rigs, is now getting into shallow water rigs and has placed orders for two jack-up rigs.
'The project cost is $457 million of which debt is $320 million and financial closure is expected to be over soon.'
According to Ashok, the equity portion of the projects will be funded through internal accruals and promoters.
'The proportion of internal accruals and promoter funding is being worked out.'
Essar Shipping is also looking at acquiring and operating ports, Ashok added.