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Our Bureau

Chennai, Oct. 31 India Cements plans to invest over Rs 160 crore to set up 40 MW of captive thermal power generation facilities to address the rising cost of power, according to Mr N. Srinivasan, Vice-Chairman and Managing Director.

Increase in coal and fuel costs were major factors that dented the company’s net profit by 40 per cent in the second quarter compared with that of the corresponding quarter in the previous year.

Mr Srinivasan told reporters that the capacity utilisation was more than 100 per cent with gross realisation at Rs 4,173 a tonne (Rs 3,900). The drop in net profit is not a sign of slow down but high costs as demand and margins continued to grow during the quarter.

The company has decided to set up two thermal power plants of 20 MW each to address the issue of rising power cost and power shortage.

During the quarter, the company promoted a company in Djakarta, Indonesia, P.T. Coromandel Minerals Resources, which is looking at acquiring coal mining concessions. This would help India Cements, which has earlier this year acquired two ships for coal transportation, control increasing coal costs.

The company’s expansion programme was on track with work initiated on the 1.5 million-tonne cement plant in Rajasthan.

A one million-tonne grinding unit at Chennai commenced operation in August. A grinding unit of similar capacity would start operation in Parli, Maharashtra, by the end of the third quarter.

More Stories on : Outlook | Cement | Power

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