In a major industry event, SunCoke Energy Inc. with interests spread across the Americas has entered into an agreement with Visa Steel to enter the coke making domain in India.
As part of the agreement, Visa Steel will hive off its existing coke making business to a SPV floated for the purpose christened Visa Coke in which SunCoke will take a 49 % stake paying US$ 67 million 9about INR 370 crores). This is the first foreign investment in the coke making industry and will have far reaching consequences, especially affecting the merchant coke makers in the domestic sector.
Apart from securing a foothold in the growing Indian market as a supplier – SunCoke will have access to the existing 4 lakh tons per annum Kalinganagar plant of Visa – the company also has plans to set up Coke making facilities for third parties on a build-own-operate-transfer (BOOT) basis.
The Indian steel industry, starved of good quality coking coal is viewing the development with keen interest as it may offer them a hedge against the random price fluctuations of the commodity. The move may also result in the import of more coals from the Americas hitherto not the favoured source for Indian importers.