Orient Cement scouting for a buy to ramp up capacity

CK Birla group company Orient Cement Ltd is on the look-out for buying a cement plant of about two or three million tonnes, according to its Managing Director and CEO Deepak Khetrapal.

The idea behind scouting for acquisition was to ramp up the total production capacity to about 10million tonnes, he told BusinessLine .

“We will also be commissioning our greenfield plant which is now ready in Gulbarga district of Karnataka in about two months from now which will up cement production capacity to 8 million tonnes,’’ he said.

Orient is now operating two plants in Telangana and Maharashtra with a total capacity of five million tonnes (mt), which will go up to eight mt after the commissioning of 3 mt Karnataka plant.

As the company had invested ₹2,000 crore in the Karnataka plant, it will be ‘comfortable’ in acquiring a smaller plant, the executive said.

In addition, the clinkerisation capacity is likely to be expanded in the existing plant in Devapur, Adilabad district, Telangana. “We have done a feasibility study in this regard in view of the limestone deposits available here for us,” Khetrapal said.

On the industry scenario, he said the cement demand has been very sluggish across the country and the industry is reported to have a nearly double digit fall on the fourth quarter ended March 31, 2015, compared to the same period previous year.

“Generally, many Government projects are pushed up in the fourth quarter but this rush did not happen this year. Housing demand has been hit by unseasonal rains. There is also unutilised inventory in housing,’’ he said.

Orient Cement scrip gained 1.10 per cent on the BSE on Monday to close at ₹174.20.

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