JK Lakshmi Cement, part of the HS Singhania Group, has taken up a Rs 2,100-crore expansion plan, to be largely funded by debt.
Shailendra Chouksey, Whole-time Director, told Business Line that the biggest portion of the expansion project – to cost Rs 1,550 crore – would entail the setting up of a 2.7-million-tonnes-a-year (mtpa) greenfield project at Durg in Chhattisgarh. This would include a captive limestone mine and two grinding units. The Durg project would use Bhilai Steel Plant’s slag.
Rs 200 crore towards loan repayment in FY13 has helped restrict the firm’s debt equity ratio to 1.09:1, as against 0.96:1 in FY12, Chouksey said.
“We have so far invested around Rs 800 crore in the project. It, along with the second grinding unit in Odisha, will be operational in early FY 2015,” he said.
Commissioning of the Durg project will take the total installed cement capacity to 8.5 mtpa from the current 5.3 mtpa. The project is meant to help the company penetrate the eastern market.
In the next leg of eastern expansion, the company has decided to put up a grinding unit in the Asansol-Durgapur region of West Bengal.
Rajasthan-registered JK Lakshmi is also setting up its second unit in Gujarat, at Surat, at a cost Rs 150 crore.
To take over sick unit
Meanwhile, the company is in the process of taking over and rehabilitating a sick unit of Udaipur Cement at an estimated cost of Rs 550 crore. “We are in the process of taking over a 1.3 mt unit. More than Rs 100 crore has been invested in the sick company, which is still under BIFR (Board for Industrial and Financial Restructuring). We expect to restart the 9-lakh-tonne grinding unit in the next two months. However, the clinker unit is likely to resume production in October 2014,” said Chouksey.