The India Cements Ltd, one of the country's leading companies in the sector, is to invest around Rs 750 crore in one of its factories in Tamil Nadu. The proposed investment is to expand the annual capacity of this plant to two million tonnes (mt).
V M Mohan, joint president, corporate finance, said the present capacity of the unit at Thalavai in Ariyalur district was 1.8 mt per annum. “The mode of funding will be decided in due course,” he said.
The company has approached the Union ministry of environment for clearance. One more proposal was also placed before the ministry, on expansion of its Salem unit. Details about this expansion were not disclosed.
“Major commencement of works at Ariyalur will start once we get the ministry's approval, which will take six to nine months,” said Mohan.
India Cements has a total yearly capacity of 15.5 mt, including 1.5 mt in Rajasthan. The company reported capacity utilisation of 67 per cent last year in its Tamil Nadu plants.
According to vice-chairman and managing director N Srinivasan, “capacity utilisation can pick up if the demand in the market continues at the existing level”.
He said after reporting a decline of three per cent in the first nine months of 2011-12, the southern market showed some sign of recovery in the March quarter, by reporting nine per cent growth. Net plant realisation increased to Rs 3,431 per tonne from Rs 2,661, while the gross realisation rose to Rs 4,777 per tonne in 2011-12 from Rs 3,853 a tonne in 2010-11.
Besides cement, the company has power generation units, fuelled by wind, gas, waste and thermal energy, with a combined capacity of
150 Mw, including the Vishnupuram plant expected to go on stream by March 2013.
The company is also in the process of investing in a coal mine in Indonesia for around $20 million.
During the quarter ended March 31, India Cements reported a 17 per cent growth in net profit at Rs 64.9 crore as against Rs 55.3 crore a year before. Total income rose 11 per cent during the quarter to Rs 1,118 crore from Rs 1,000 crore a year before.
