Chennai-based India Cements Limited is planning to invest around Rs 750 crore in one of its plants located at Thalavai in Ariyalur district of Tamil Nadu. The proposed investment is aimed at expanding the existing capacity of the plant to two million tonne, from the present 1.8 million tonne a year.
“The proposed expansion requires anywhere between Rs 700 crore and Rs 750 crore. The mode of funding will be decided in due course,” VM Mohan, joint president (corporate finance), India Cements, told Business Standard.
The company has approached the ministry of environment to obtain clearances for the proposed expansion. Besides the capacity expansion at Ariyalur, one more proposal has been placed before the ministry, which is related to the expansion of its Salem plant. Details about this expansion, however, were not disclosed.
“Commencement of major works at Ariyalur will kick off once we get the ministry’s approval, which will take around nine months,” Mohan said.
India Cements, one of the largest cement manufacturers in the country, currently has a total capacity of 15.5 million tonne, including 1.5 million tonne in Rajasthan.
The company reported a capacity utilisation of 67 per cent at its Tamil Nadu plant last year. According to India Cements vice-chairman and managing director N Srinivasan, “the capacity utilisation could pick up if the demand in the market continues at the existing level.”
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After reporting a negative growth of around 3.03 per cent, the southern market has shown some signs of recovery in the last quarter by reporting an 8.98 per cent growth, he said, adding that the net plant realisation increased to Rs 3,431 per tonne from the earlier Rs 2,661, while the gross realisation rose Rs 4,777 per tonne in 2011-12 from Rs 3,853 a tonne in 2010-11.
The company also has power plants with a combined capacity of 150 Mw. Its Vishnupuram plant is expected to go on stream by March 2013. India Cements is also in the process of going in for a coal mine in Indonesia with an investment of around $20 million.
For the quarter ended March 2012, India Cements has reported a 17 per cent growth in net profit to Rs 64.92 crore, as against Rs 55.28 crore in the corresponding quarter a year ago, primarily on the back of better plant realisation. Its total income rose 11 per cent to Rs 1,118.48 crore during the quarter, as compared to Rs 1,000.14 crore during the same period last year.