SunCoke Energy Inc.
) and Indian steel major, VISA Steel Limited, officially declared
the initiation of their cokemaking program in India. SunCoke
teamed up with VISA Steel to form VISA SunCoke Limited, which has
an asset basket comprising 400,000 metric tons of heat recovery
coke facility and related steam generation units in Kalinganagar,
SunCoke and VISA Steel will hold 49% and 51% of interest,
respectively, in the collaborative venture. SunCoke invested
around $67.0 million (Rs. 368 crore) in the project. The alliance
between SunCoke and VISA Steel for the coke program was announced
originally in Nov 2012.
Both the companies will run the partnership with equal
representation on the board. The joint venture will allow the
companies to pool in their expertise and resources. This will
help serve the growing customer needs for superior quality coke
in India. VISA SunCoke is expected to capitalize from the
expanding coke industry in India.
The joint program comes at an opportune moment when
infrastructure, transportation and housing activities in India
are on the rise. This will lead to a jump in steel demand and in
turn will increase the need for coke which is the primary input
We believe this joint venture will certainly be a major
revenue churner for the company, going forward. Other potential
markets offering attractive prospects are the emerging economies
of China and Brazil.
However, the weak U.S. coal market environment could thwart
the company's growth opportunities. Presently, the company
carries a Zacks Rank #3 (Hold).
Other stocks we presently prefer are Zacks Ranked #2 (Buy)
Atmos Energy Corporation
DTE Energy Company
Based in Lisle, IL, SunCoke Energy, Inc. engages in mining and
producing coke in the Americas. It offers metallurgical and
thermal coal for steel making processes. The company has a market
capitalization of $1.14 billion.
ATMOS ENERGY CP (ATO): Free Stock Analysis
DTE ENERGY CO (DTE): Free Stock Analysis
SUNCOKE ENERGY (SXC): Free Stock Analysis
VECTREN CORP (VVC): Free Stock Analysis
To read this article on Zacks.com click here.