The Hindu Business Line : Madras Cements to spend Rs 1,052 cr on expansion

Capacity course
The greenfield plant in Tamil Nadu is expected to go on stream in the fourth quarter of 2007-08.
The additional clinker facility in Andhra Pradesh - a 4,000-tonne- a-day kiln - will be ready in the second quarter of 2007-08.

Chennai , May 27

Madras Cements Ltd plans to spend Rs 1,052 crore on increasing capacity by 4 million tonnes (mt), by 2007-08. Of this, Rs 613 crore will be on a new two mt a year plant near Ariyalur in Tamil Nadu and Rs 439 crore on additional clinker facility at its existing plant in Jayanthipuram, Andhra Pradesh.

This will result in cement capacity going up by 2 mt at the Jayanthipuram plant.

The greenfield plant in Tamil Nadu is expected to go on stream in the fourth quarter of 2007-08, while the additional clinker facility - a 4,000 tonnes a day kiln - will be ready in the second quarter of 2007-08.

Madras Cements' capacity now is about 6 mt, with plants in Tamil Nadu, Andhra Pradesh and Karnataka.

According to Mr A.V. Dharmakrishnan, Executive Director - Finance, Madras Cements will fund the expansion with a mix of own funds and debt.

The company will shortly finalise the equipment suppliers for the projects.

Q4 net up 42 pc

For the quarter ended March 31, 2006, it has posted a 42 per cent increase in profit after tax and a 44 per cent increase in sales over the same period last year.

For 2005-06, the company's net profit increased by 41 per cent and sales by 36 per cent over the previous year.

The board of directors has recommended a final dividend of Rs 5 a share (50 per cent), taking the total dividend for the year to Rs 15 (for a Rs 10 share).

The improved performance was due to higher sales and an increase in selling prices in the market, according to Mr Dharmakrishnan.

The company's plants operated at full capacity from the last quarter of 2005-06, following increased demand for cement in the southern region. Prices improved in all the four southern States.

According to a company press release, it sold 47.28 lakh tonnes of cement during the year against 38.39 lakh tonnes the previous year.

It exported 2.88 lakh tonnes of clinker (1.02 lakh tonnes in the previous year) and 2.28 lakh tonnes of cement (82,990 tonnes) during the year with export income going up to Rs 85.20 crore from Rs 25.48 crore last year.