HEG Limited, a prominent player in the graphite electrode industry, is making a significant move to expand its production capabilities. The company recently announced plans to add 15,000 tonnes per annum (TPA) to its existing graphite electrode and related products capacity. This strategic expansion comes as the company looks to capitalize on a structural shift in the industry, which is boosting demand for electrodes.
Currently, HEG operates with an impressive 1,00,000 TPA capacity, utilizing it efficiently at 85% to 90%. The proposed 15,000 TPA addition will further solidify its market position. This ambitious project is slated for completion within 30 months and will require an approximate investment of ₹650 Crores. The company plans to finance this expansion through a combination of internal accruals and, if necessary, debt.
The rationale behind this substantial investment is clear: the industry is experiencing a positive structural change, leading to increased demand for graphite electrodes. HEG anticipates a “healthy payback” from this expansion, indicating confidence in the long-term prospects of the market. For context, HEG Limited’s shares were last traded at ₹531.75, reflecting a 7.2% dip before the market closed.
This capacity addition is a strong signal of HEG’s commitment to growth and its proactive approach to meeting future market needs. It’s an exciting development for the company and its stakeholders, positioning HEG to potentially capture a larger share of the evolving graphite electrode market. 🚀
source: Corporate Announcement