The Hindu Business Line : Ckoramaandel Cements to invest Rs 700 cr in expansion

Hyderabad, June 24 Ckoramaandel Cements Ltd will be investing Rs 700 crore in ‘brownfield’ expansion of its production capacity in two phases over the next two years.

The financial closure for the first phase of expansion with Rs 135 crore was completed and the civil and fabrication works had begun, Mr Ramesh Chandro, Managing Director, Ckoramaandel Cements, told Business Line here.

The first phase of expansion at its plant at Ramapuram of Nalgonda district in Andhra Pradesh would be completed by March 2009. “This will increase our cement production capacity from current 0.16 million tonnes (mt) to one mt. The investment of Rs 135 crore was pooled in through debt (Rs 95 crore), internal accruals and equity (Rs 31 crore) and working capital (Rs 9 crore),” he said.

In the second phase of expansion, likely to be completed by June 2010, the Hyderabad-based company has lined up Rs 565 crore investments for a new line to add 1.5 mt. “This will take up the total capacity to 2.5 mt. We are in talks with banks for the funds,” Mr Chandro said. The supplies were identified and orders for equipment would be done in October, he added.

Ckoramaandel Cements, which had an equity of 8.1 crore originally, had issued bonus shares in the ratio of 7:4 which increased its equity to Rs 22.28 crore. The company posted Rs 11.5 crore net profit in 2007-08 on a total sales of Rs 68 crore.

“In the current year, we are expecting to clock total sales of Rs 90 crore,” Mr Chandro said.

The company’s stock, which began trading on March 27 with Rs 9.50 after a gap of 12 years, has been shooting up. It jumped more than 80 per cent in a month’s time and traded on Monday at Rs 57.85.

On the reason for its run on the bourses, Mr Chandro said some traditional investors from the Ahmedabad region were interested in buying the shares.

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