In­dia Ce­ments plans to set up ₹1,000-cr unit in Mad­hya Pradesh

Q2 net plum­mets 94% to ₹1.43 crore

The Hindu Business Line - - NEWS -

In­dia Ce­ments will set up a new fac­tory in Mad­hya Pradesh en­tail­ing an in­vest­ment of ₹1000 crore, a move that is aimed at pre­par­ing the com­pany to meet emerg­ing de­mand in the com­ing years.

The pro­posed fac­tory will have a ca­pac­ity of about 2.5 mil­lion tonnes a year, in­creas­ing the to­tal ca­pac­ity of the com­pany to 17.5 mil­lion tonnes.

“The process of ap­ply­ing for en­vi­ron­ment li­cence and other ap­provals has started and the plant may be­gin op­er­a­tions by Jan­uary 2021. We plan to fund this through our in­ter­nal ac­cru­als only. If needed, we may go for a small bridge loan,” N Srini­vasan, Vice-Chair­man & Man­ag­ing Di­rec­tor of In­dia N Srini­vasan, Vice-Chair­man and Man­ag­ing Di­rec­tor, In­dia Ce­ments Lim­ited

Ce­ments said here. The de­ci­sion to es­tab­lish a new fac­tory comes af­ter the com­pany’s ac­qui­si­tion of en­tire share­hold­ing of Spring­way Min­ing Pvt in Mad­hya Pradesh for a sum of ₹183 crore.

The com­pany has a min­ing lease for more than 100 mil­lion tonnes of lime­stone, a key raw ma­te­rial for pro­duc­ing ce­ment, in the State.

Ris­ing de­mand

The pro­posed unit will help the com­pany tap a large mar­ket like MP which is crowded by many play­ers. It will also cater to neigh­bour­ing States.

In­dia Ce­ments is also con­tem­plat­ing ex­pand­ing ca­pac­ity at its other fac­to­ries as it is hope­ful of reach­ing full ca­pac­ity util­i­sa­tion dur­ing the fourth quar­ter of this fis­cal, up from about 80 per cent now and 67 per cent in last fis­cal.

The com­pany is bullish on de­mand sce­nario over the next few years in view of the grow­ing ce­ment con­sump­tion on the back of higher in­fra­struc­ture projects in the coun­try.

Q2 net down

The com­pany has re­ported a drop in its net profit at ₹1.43 crore for the quar­ter ended Septem­ber 30, 2018 when com­pared with ₹23.67 crore in the year-ago quar­ter, mainly due to cost pres­sures.

Srini­vasan said the tough ce­ment mar­ket con­di­tions in the South cou­pled with a steep in­crease in fuel and power prices (₹407 crore in Q2 of this fis­cal as against ₹297 crore in the prior year quar­ter) along with de­pre­ci­a­tion of ru­pee af­fected the op­er­at­ing per­for­mances dur­ing the quar­ter. The com­pany had a loss on ac­count of for­eign fluc­tu­a­tions to the tune of ₹12 crore.

The com­pany sold about 30.10 lakh tonnes of ce­ment in Q2 of this fis­cal, up 11 per cent. But net plant re­al­i­sa­tion was lower at ₹3,347 per tonne (₹3,473 tonne ), due to which there was a bot­tom­line ero­sion of ₹38 crore for the quar­ter.

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