India Cements plans ₹1,400 cr. expansion

Company’s production capacity to grow by a third and touch 20 million tonnes in two years

The India Cements Ltd. (ICL) is working on expanding its production capacity from the existing 16 million tonnes to 20 million tonnes over the next two years, according to a top official.

ICL has already started the ground work for an integrated plant at Damu in Madhya Pradesh and a grinding unit in Uttar Pradesh.

The expansion programme is expected to involve an investment outlay of ₹1,300 crore to ₹1,400 crore.

Upgradation of existing plants would also form part of the expansion initiative.

“We have a mining lease in Madhya Pradesh. We are now in the process of buying the land,” said N. Srinivasan, vice-chairman and managing director, ICL.

To a question, he said ICL required about 500 hectares for mining and another 200 acres for the integrated cement plant in Madhya Pradesh. The company had already purchased 160-170 hectares from private parties, he added. The project cost would be met through a combination of borrowings and internal accruals, he added.

“We will start the work on the three-million-tonne integrated plant once the land acquisition reaches a sizeable portion and then place order for equipment,” he said. According to ICL officials, it would take at least three-to-four months to begin the project. It would be ready in two years, taking the total capacity to almost 20 MTPA.

Net profit rises

ICL posted a 243% increase in its standalone net profit for the first quarter ended June 2019 to ₹72.43 crore on the back of improved selling prices, cost control measures and softening fuel costs.

Revenue from operations grew to ₹1,468.80 crore from ₹1,360.65 crore.

Earnings before interest, depreciation, taxes and amortisation (EBIDTA) improved to ₹245 crore from ₹162 crore.

During the quarter, ICL’s cement sales, including clinker, stood at 30.42 lakh tonnes against 30.75 lakh tonnes.

The net plant realisation increased by 11%.

“EBIDTA increased by more than 50%. We recorded higher EBIDTA after 11 quarters.

“Our capacity utilisation was 77%, and during this year, we expect it to reach 85%,” Mr. Srinivasan said.

Asserting that the cement industry had to remain content with a marginal growth of 1.2% during the first quarter against 13% registered in the corresponding quarter last year, he expected the demand to revive post monsoon and once governments finalised their action plans on the infrastructure front.

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Printable version | Jul 5, 2020 7:07:17 PM |

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