The Hindu Business Line : Dalmia Cement to hive off sugar division

DALMIA Cement (Bharat) Ltd, which has interests in cement and sugar, plans to restructure itself into companies that deal with these two businesses separately.

It has floated a subsidiary, Ramnagar Chini Mills Ltd, to undertake sugar manufacturing activities. The company now plans to hive off its sugar division to this new company, for which it will seek its shareholders approval through a postal ballot.

Ramnagar Chini Mills, according to the company's explanatory statement for a resolution seeking shareholders approval, will put up a greenfield sugar manufacturing project having a capacity of about 7,000 tonnes of cane crushed a day (tcd) with a cogeneration power project.

Dalmia Cement (Bharat) Ltd has a sugar mill with a 5,000 tcd capacity at Ramgarh in Uttar Pradesh.

According to Dalmia Cement, it is in the process of examining various options to convert itself into pure play companies focussing on cement and sugar businesses. Apart from these two businesses, Dalmia Cement also has a project to produce dead burnt magnesite in Salem in Tamil Nadu, besides other divisions such as wind farms and travel.

A company official said the company was only seeking shareholders approval for an enabling resolution, as the restructuring of the business activities may involve transferring the company's sugar unit.

Dalmia Cement (Bharat) is expanding its cement manufacturing capacity by about 2 million tonnes a year, at its existing plant at Dalmiapuram in Tamil Nadu. The expansion, which would cost about Rs 365 crore, will take the company's cement manufacturing capacity to 3.5 million tonnes a year. Besides the expansion, the company is also putting up a 29 MW captive thermal power plant.

The expansion was to have been completed by July 2005, but would now be finished only by early December, the official said.

For the quarter ending June 30, 2005 the cement division contributed Rs 100.85 crore and the sugar division Rs 35.20 crore of the company's net sales of Rs 151.13 crore.

On Tuesday, the company's shares closed at Rs 750.70 on the NSE.

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