The Hindu Business Line : KCP looks to diversify

The Chennai-based cement and heavy engineering company KCP Ltd is looking at diversifying into new business areas such as container freight stations, hotels, commercial complexes and wind farm.

The company's Chairman and Managing Director, Dr V.L. Dutt, said that the company is seeking shareholders' approval for the proposal. For now, the move should be seen as an enabling resolution and the ideas are in the concept stage.

According to information provided by the company to the stock exchange, KCP has sought shareholders' approval to alter the object clause to enable entry into the new businesses.

These are not KCP's core areas, but the company wants to utilise the business opportunity presented by its real estate assets in Tamil Nadu and Andhra Pradesh. Also, with the cement and engineering businesses on a buoyant phase the company wants to use the surplus funds in these new investments, he said.

Further developments will depend on the company establishing business relations with partners with appropriate expertise, Dr Dutt said.

The company is examining a total investment of about Rs 60 crore in the projects.

Developments

The proposals envisage developing the company's land in Tiruvottriyur, North Chennai, as a container freight station at a cost of about Rs 20 crore, the commercial complex and multiplex planned in Vijayawada, Andhra Pradesh, would involve about Rs 10 crore and a 100-room, three-star hotel in Hyderabad about Rs 35 crore. The company is in discussions with domestic and international players in the hotels business and has asked for proposals, Dr Dutt said.

Net profit at Rs 10 cr

During the first quarter ending June, KCP Ltd reported a net profit of Rs 10.16 crore on net sales of Rs 62.49 crore. During the corresponding period in the previous year, the company reported a net profit of Rs 29 lakh on net sales of Rs 51.14 crore.

KCP's shares of face value of Rs 10 touched a high of Rs 240.15 and closed at Rs 233.75 on the NSE on Friday.

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