Somani bags Rs 32 cr order from Iraq firm

Somani Cement Company (SCCL) has bagged a Rs 32 crore order from a Iraq-based multinational company.

The Vadodara-based company will export over 50,000 tonne of cement and around 45,000 tonne of clinkers by the end of the next financial year.

"The investment in infrastructure developments works in the Gulf region has led to a surge in demand for cement. With India's close proximity to the Gulf region, most of the cement exports to the region are from India. We are also targeting the huge opportunity in the reconstruction of Iraq," Bimlesh Kumar Mishra, managing director, Somani Cement, said on Thursday.

The company is in the process of setting up a 1500 tpd vertical shaft rotrate technology cement plant at Mahuva in Bhavnagar with an investment of over Rs 150 crore.

Somani plans to have a technical collaboration with Associated Cement Companies (ACC) for the plant. ACC has already conducted the project viability study and selected the project site. Somani will purchase machinery and equipment worth over Rs 65 crore for the cement plant from Cimco Birla.

"The company is in midst of a financial structuring and plans to fund the Mahuva project with a debt of Rs 110 crore from various NRI groups and equity of Rs 40 crore. The company may go in for an initial public offering by the end of the next financial year," said Mishra.

Somani manufactures and trades in portland cement and lime pozolone cement. It plans to market the product under the brand 'Somani Cement'. The company reported a cumulative loss of Rs 20 crore in the last financial year. It, however, plans to turn to profits in the next two year.

The company, with a debt of Rs 44 crore, also plans to be debt-free in the next two years.

Somani has a paid up capital of Rs 7.16 crore. 13 per cent of the shares are held by the Indian promoters, 17 per cent are held by the corporates floated by the promoters and 58 per cent held by the Indian public.

Different banks, foreign institutional investors (FIIs), and insurance companies have five per cent stake in the project. Punjab National Bank (PNB) recently acquired a 4.35 per cent stake in the company and Morgan Stanley has 0.5 per cent stake.