India Cements mulls Rs. 1,400-crore capacity expansion.
August 13, 2019
India Cements plans to set up a new integrated cement factory in Madhya Pradesh and a grinding unit in Uttar Pradesh involving an investment in the range of ₹1,300-1,400 crore in preparation for the future demand in North and Central India.
Its current capacity is about 16 million tonnes and the proposed expansion may take the total capacity to about 20 million tonnes in 2-3 years’ time. The move is also expected to make the company a pan-India player.
“We are in the process of buying all the lands privately in Madhya Pradesh and we hope to complete the land acquisition process in 3-4 months. After this, we will look into raising money for the project,” N Srinivasan, Vice-Chairman & Managing Director of India Cements, said here.
The company has a mining lease for more than 100 million tonnes limestone, a key raw material for producing cement, after the acquisition of Springway Mining Pvt in Madhya Pradesh last year. The proposed grinding unit is expected to come near Allahabad in Uttar Pradesh.
The expansion will provide an advantage of tapping markets such as Central and Northern regions in future.
Meanwhile, the company’s net profit in the first quarter of this fiscal rose to ₹72 crore compared with ₹21 crore in the year-ago quarter, supported by better prices (net realisation increased by ₹360 per tonne) for cement and cost control measures.
Its revenue grew 8 per cent at ₹1,469 crore (₹1,361 crore). The EBIDTA grew more than 50 per cent at ₹245 crore (₹162 crore). This high operating profit comes after 11 quarters.