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K. Giriprakash

Bangalore, July 5

Binani Cement is making key investments in foreign markets, including a $100-million expansion of its plant in China and another $125 million for buying plants in Mauritius and West Asia.

It is also in the process of setting up two more cement plants in Gujarat with a total capacity of 3 million tonnes (mt) at an investment of Rs 1,000 crore. Binani Cement Managing Director, Dr Vinod Juneja, told Business Line that investments in overseas markets would help the company to hedge its risks against any turbulence in the domestic market.

In China, Binani Cement, which is owned by the Brij Binani Group, plans to increase capacity to 2.5 mt from 0.8 mt. Dr Juneja said that the company plans to start exporting cement manufactured in its plant in China to countries in Africa. Binani will invest about $70 million in the Chinese plant, while the rest will be invested by the joint venture partner, Shandong Rongan Group.

Dr Juneja said the total capacity of all its plants will be doubled to over 13 mt by 2011 which will take the company’s valuation to around $1.5 billion. About 50 per cent of the total capacity has been earmarked for the domestic market and the rest will be for the export market.

The promoters of Binani Cement will invest Rs 500 crore in the two new plants in Gujarat, while the rest will be raised through debt. “We have promised our bankers that we will try to maintain 1:1 debt equity ratio for all our projects,” Dr Juneja said. The total debt at present is around Rs 1,400 crore.

Binani is also in the process of acquiring a lignite mine near Gujarat for which an investment of around Rs 400 crore over a period of three years has been set aside.

The Brij Binani Group has consolidated all its cement business under Binani Cement Ltd, which in turn controls the Indian plants. The plants in China and Dubai are owned through a special purpose vehicle.

More Stories on : Overseas Investments | Cement

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