India Cements Acquiring Land To Set Up Integrated Plant In Madhya Pradesh
The India Cements Ltd. is in the process of acquiring land as part of the cement major’s move to set up an integrated facility in Madhya Pradesh.
Besides, the company was engaged in setting up a grinding unit near Allahabad in Uttar Pradesh, India Cements Vice-Chairman and Managing Director N Srinivasan said. “We are in the process of buying the land required. We will also be setting up a grinding plant in Uttar Pradesh. Investments will be Rs 1,300-Rs 1,400 crore,” he said.
In Nov. 2018, the company entered into a share purchase agreement for acquiring the entire shareholding of Springway Mining Pvt. Ltd. in a phased manner for a total consideration of Rs 182.89 crore. The acquisition’s objective was to set up a cement plant in Madhya Pradesh. Springway Mining is involved in mining and quarrying business.
With the setting up of the two facilities, Srinivasan said it would take the firm’s current capacity level close to 20 million tonne from 15-16 million tonne.
The company was in the process of buying 500 acres with limestone deposits in Madhya Pradesh and another 200 acres for setting up the cement plant, he said to a query.
Commenting on the financials for the April-June 2019 quarter, he said the cement business has improved overall. “We had a very good first quarter. It is expected to continue the good performance in the coming quarters with increasing demand for cement from housing and infrastructure sectors, steady cement price and cost reduction measures.”
The company recorded a jump in its standalone net profit to Rs 72.21 crore for the April-June 2019 quarter from Rs 21.03 crore registered in the same period last year. Total income for the April-June 2019 quarter grew to Rs 1,472 crore on a standalone basis from Rs 1,366.17 crore registered a year ago.
Expressing hope that it would be a good year for the cement sector, Srinivasan said, the industry was poised for good growth as demand-supply was very good in the west, north, south regions excluding Andhra Pradesh. “We expect demand to revive post monsoon and once the new governments in Andhra Pradesh and Centre finalise their action plans,” he said.
Srinivasan said the company’s earnings before interest, tax, depreciation and amortization increased by more than 50 percent in April-June 2019 quarter which was being recorded after a gap of 11 quarters. During the quarter under review, the capacity utilisation of the company’s manufacturing facilities was at 7 percent.
The overall cement sales including clinker was at 30.42 lakh tonne for the quarter under review as compared to 30.75 lakh tonne in same quarter of previous year. With the improved selling price of cement, the net plant realisation went up by 11 percent during April-June 2019 over the same quarter of previous year.