Somani to buy MP cement firm

Rs 9 crore deal to add 300 tonnes capacity for Vadodara-based company

Vadodara based Somani Cement Company is set to acquire Madhya Pradesh-based Apex Cement Company in a Rs 9 crore deal.

"Acquiring Apex Cement would help us to enhance our capacity by over 300 tonnes per day (tpd). We will use this capacity to cater to our domestic orders. Our existing facility would be engaged to meet international demand," Bimlesh Kumar Mishra, managing director, Somani Cement said.

Somani has recently bagged an export order worth over Rs 32 crore from an Iraq-based firm. The order is to be executed in the financial year 2005-06.

The company aims to export over 50,000 tonnes of cement and 45,000 tonnes of clinkers by the end of next financial year. It will market the product under the brand 'Somani Cement'.

Somani Cement manufactures and trades in port land and lime pozolone cement. It has a 300 tpd manufacturing facility in Panchmahal district which will now be used to fulfill export orders.

Meanwhile, the company is in the process of setting up a 1000 tpd plant at Mahuva in Bhavnagar district. The Rs 150-crore plant will use the vertical shaft Kollen rotrate technology.

Associate Cement Companies (ACC) had recently conducted a project viability study for the project. Somani will have a technical collaboration with ACC and will purchase machinery and equipment worth over Rs 65 crore for the plant from Cimco Birla.

The Bombay Stock Exchange (BSE) listed company has reported a loss cumulative of Rs 20 crore in the last financial year. It hopes to be in the black by the end of the next financial year. The stock closed at Rs 5.20 on the BSE on Tuesday.

Somani with a debt of Rs 44 crore, which it aims to clear March 2006, through a one time settlement scheme (OTS).

"We have reduced our losses by Rs 3 crore in the last financial year. This year we will reduced by another Rs 4 crore and we will be in the black in the next two years," said Mishra.

The company registered a net profit of Rs 2.80 crore for the quarter ended September 30, 2004, as compared with a loss of Rs 1.98 crore in the corresponding quarter last year. Net sales rose 26 per cent at Rs 4.12 crore (Rs 3.27 crore).