The Hindu Business Line : Ckoramaandel Cements lines up Rs 65-cr expansion

Hyderabad, Aug 14 Ckoramaandel Cements Ltd has lined up a Rs 65-crore expansion project to significantly increase its cement production capacity over the next two years.

“We will be increasing our cement production capacity from the current 0.2 million tonnes to 2.4 million tonnes in two phases,” Mr Ramesh Chandro, Managing Director, Ckoramaandel Cements, told Business Line here.

New line in phase 2

In the first phase, the firm would increase its existing capacity to 0.9 million tonnes. “However, the second phase expansion is larger as we will be putting up a new line with 1.5 million tonnes capacity,” Mr Ramesh said.

The first phase of expansion would be completed by October 2008 and the new line would be operational by September 2009. “With this expansion, we will graduate from mini plant status to major plant,” he said.

The company, which has its plant in Ramapuram village of Nalgonda district in Andhra Pradesh, is “comfortable” as far as the raw material is concerned. “We have sufficient limestone deposits of over 250 million tonnes to support the capacity augmentation,” Mr Ramesh said.

Debt-equity funding

The total investment earmarked for expansion is Rs 65 crore. “Out of this, 70 per cent would be debt and 30 per cent would be equity. The equity would be raised either by book-building or by private placement,” he said.

All the paper work for the expansion had already been completed and the public hearing of environmental clearance was held recently. The company hasd also finalised the suppliers for expansion, he added.

On the supply front, the current focus of the company has predominantly been on Andhra Pradesh. “With the steep increase in demand within the State, all our present capacity is catering to the needs here. However, after expansion, we will supply cement to other States,” Mr Ramesh said.

The firm, which has Bhima Cement as its flagship brand was getting requests from outside Andhra Pradesh. “Over the next two years, Ckoramaandel will also address markets in Tamil Nadu, Karnataka, Kerala, Orissa and Maharashtra besides Andhra Pradesh,” he added.