The Hindu Business Line : Andhra Cements to expand capacity

According to Mr G.P. Goenka, Chairman, Andhra Cements, the company's Phase-I capacity is to be increased to at least three million tonnes from the current capacity at 1.7 million tonnes.

The cost, which is likely to be Rs 100 crore, is to be financed through debt and internal accruals.

No price hike is expected till the end of this year. Current prices are hovering around Rs 160-165 per bag.

The company is looking to increase exports to 40,000 tonnes per month.

Firming up expansion plans will be done before the end of 2006.

There is no long-term debt outstanding, except ICICI Bank loans recently taken.

Excerpts from CNBC - TV18's exclusive interview with Mr Goenka:

Could you give us more details about your expansion plans going forward?

We are now in the process of coming up with an expansion plan. We are getting everything set to start the expansion plan before the current yearly results.

What kind of total capacity do you expect this plant to be operating at?

The capacity will be around three million and the plant will be operational in fiscal 2008.

At what percentage of capacity would this plant be working on?

The plant will be working on 100 per cent capacity.

Where does your export stand currently and how much of an enhancement would this project bring about?

In the last six months, our performance has been pretty dismal but our current export plan is about 20,000 tonnes a month. Part of this expansion plan allows for an increase in the grinding capacity, which will help increase our exports to at least 40,000 tonnes per month.

How much does your long-term debt stand at right now?

Except for loans, which we have taken from ICICI Bank now, there will be no long-term debt outstanding. So we really have no re-payment pressure at all.

Are you contemplating price hikes in the near future and what are your average realisations per bag right now?

Currently, we are in the range of about Rs 160-165. We don't expect a price hike until later this year.