Deccan Cements expanding production capacity

Hyderabad-based Deccan Cements Limited (DCL) is expanding its production capacity by 10 lakh tonne with an outlay of about Rs 340 crore.

The expansion would be completed by September 2009, said L Jayashankar, executive vice-president, DCL, on the occasion of the company's north coastal Andhra dealers meet here.

"Currently, our Nalgonda plant has a production capacity of 7 lakh tonne a year, which the management is enhancing it to 17 lakh tonne. Work on the capacity expansion has already begun," he said. Of the total Rs 340 crore, the company would contribute Rs 150 crore from internal accruals, and the balance Rs 190 crore would be mobilised from financial institutions, he added.

During the fiscal ended 2006-07, DCL registered about 12 per cent growth in sales at Rs 190 crore. This was Rs 20 crore higher than the previous year. "Our cement production increased by 30,000 tonne to 6.25 lakh tonne in 2006-07 over the last fiscal, but due to better price reliasation on cement our turnover increased by Rs 20 crore," he said.

He said because of raw material shortage, the production was limited to 6.25 lakh tonne even though the capacity was 7 lakh tonnes.

The company is also planning to expand the marketing network across the southern states. "Currently, we sell 95 per cent of our product in Andhra Pradesh only, and 5 per cent in Chennai. We we need a wider market to trade 17 lakh tonnes of cement and keeping this in mind, we are planning to set up a strong marketing network in Tamil Nadu, Kerala, Karnataka, and parts of Maharashtra, Goa and Puducherry," M Krishnam Raju, general manager (marketing), DCL, said.

At present, DCL moves its total production by road but plans to move around 35 per cent by rail post expansion. Accordingly, the company is creating a railway siding facility at the plant premises, he added.