French ce­ment firm Vi­cat to in­vest over `1,700 crore

Financial Chronicle - - MONEY GAME -

would spend about Rs 1,225 crore (€153 mil­lion) in ex­pand­ing its Kal­aburagi fac­tory from 2.75 MT per an­num to over 5 MT.

It would also set up a green­field fac­tory at Viziana­garam in An­dra Pradesh with an in­vest­ment of over Rs 400 crore to take Vi­cat’s to­tal ca­pac­ity in In­dia to 11 MT by 2021.

He said the com­pany has al­ready ac­quired 200 acres in Vizag for a grind­ing plant. It is be­ing set up as part of its strat­egy to tap new mar­kets like Odisha and West Ben­gal along with the ex­ist­ing mar­ket in Andhra Pradesh.

Vi­cat com­petes with French gi­ant La­farge, In­dian ce­ment brands such as Ul­traTech, ACC and Am­buja, among oth­ers. It has no plans of de­creas­ing prices to sell more at the cost of prof­itabil­ity. The com­pany recorded sales of 2.4 MT out of a ca­pac­ity of 2.75 MT from Kal­burgi last year prompt­ing it to add an­other line.

In­dian ce­ment in­dus­try has a to­tal in­stalled ca­pac­ity to pro­duce a to­tal of over 450 MT per an­num, out of which about 270 MT were sold last year. “The pric­ing of the ce­ment in the mar­ket is not good. But we are un­der no pres­sure to sell at a cheap price,” Sax­ena pointed out.

He said the com­pany has al­ready in­vested Rs 300 crore this year to ex­pand its busi­ness in the coun­try. “We have set up 1.2 MT of bulk ce­ment ter­mi­nal at Kalam­boli in Mum­bai with an in­vest­ment of Rs 70 crore and our plans are on track to set up the sec­ond line of 2.75 MT per an­num ca­pac­ity at the ex­ist­ing Kal­burgi ce­ment plant,” Sax­ena said.

With ex­pan­sion, the brand at pre­sent has a mar­ket share of 10 per cent in Mum­bai, 18 per cent in Andhra Pradesh and Te­lan­gana, 5 per cent in Tamil Nadu, 14 per cent in Kar­nataka and 3 per cent in Ker­ala re­gions.

In the last 10 years, the com­pany op­er­ates in 8 states namely Andhra Pradesh, Te­lan­gana, Goa, Kar­nataka, Ker­ala, Ma­ha­rash­tra, Puducherry and Tamil Nadu through a net­work of 3,300 deal­ers.

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