The Hindu Business Line : Rajasthan clinker facility may increase Grasim cement dispatches

Mumbai, April 1 Grasim Industries may add about four million tonnes to its dispatches in the financial year 2009-10 with the commissioning of the clinker facility at Kotputli in Rajasthan.

On stand alone basis, the company registered a 4.4 per cent growth in total cement despatches at 11.9 million tonnes in the first nine months of FY ’09.

The company recently commissioned 3.3-mt clinker facility.

Though the company officials were not available for comment on the investment in the project, analysts estimate it between Rs 700 crore and Rs 750 crore. The increase in dispatches may start reflecting from May as the new production facility takes a few months to stabilise, said an analyst.

However, Grasim is expected to partly incur depreciation costs in FY 09 itself, with the company’s depreciation amounting to Rs 331.6 crore in the first nine months of FY ’09, he added.

Oversupply fears

Many cement companies have recently announced commissioning of new projects, which may result in oversupply in the market, particularly when the future for cement demand remains uncertain.

Shree Cement had commissioned an additional one-mt clinker capacity at Bangur City, Ras in Pali district of Rajasthan.

The latest addition will help the company to ramp up its annual cement production capacity to 10 mt from nine mt.

Dalmia Cement started commercial production of the 2.50 mt greenfield cement project at Chinnakomerla village in Andhra Pradesh.

Grasim Industries shares in BSE were down two per cent at Rs 1,545, while Shree Cement and Dalmia Cement gained two per cent each at Rs 725 and Rs 79 on Wednesday.

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