Ramco Cements draws up plans for ₹636-cr new capacity expansion

Our Bureau Chennai | Updated on July 27, 2021

AV Dharmakrishnan, CEO

Net profit jumps 54% in Q1

Ramco Cements will under take an expansion-cum-modernisation programme involving ₹476 crore at its Ramasamy Raja Nagar factory in Tamil Nadu.

The company will set up a clinker line with a capacity of 3,000 tonnes per day (TPD). The old kiln with a capacity of 1,040 TPD will be decommissioned. Net clinkerisation capacity will be go up from 1.09 million tonnes per annum (MTPA) to 1.44 MTPA.

“We are going for expansion of Ramasamy Raja Nagar unit. Orders for major equipment have been placed. Civil work order has also been finalised. Environment clearance (EC) is expected in September. The unit is expected to be commissioned in 15 months from the receipt of EC,” said AV Dharmakrishnan, Chief Executive Officer, The Ramco Cements.

The company also plans additional capacity for dry mortar business with an investment of ₹169 crore. It plans to set up four units — each at an investment of ₹40 crore within existing cement units in Tamil Nadu, Orissa and Andhra Pradesh. This is mainly to produce high value products such as water proofing, repair products, flooring screeds including liquid products.

The projects are in addition to on-going expansion programmes across many units of the company.

Net profit up

Meanwhile, the company has reported a 54 per cent increase in standalone net profit at ₹169 crore for the first quarter of the current fiscal compared to ₹110 crore in the year-ago period helped by better prices and cost control measures amid lockdown. In the March 2020 quarter, the company reported a net profit of ₹214 crore.

In the June quarter, EBITDA grew 37 per cent to ₹370 crore against ₹270 crore in June 2020 quarter. Revenue grew 17 per cent to ₹1,235 crore compared with ₹1,052 crore on the back of increase in cement sales at 21.41 lakh tonnes, up 11 per cent, compared to 19.37 lakh tonnes.

Tight cost control measures in manufacturing operations and effective austerity measures taken to control fixed overheads, among others supported the performance. Cost of materials per tonne of cement increased to ₹828 compared to ₹797 in Q1 of last fiscal. Likewise, logistics cost per tonne jumped to ₹1,073 from ₹1,042 due to increase in diesel price by 29 per cent year-on-year. Power and fuel cost per tonne also increased to ₹1,031, from ₹780.

“With lot of uncertainties and commodity prices going up without corrections, we were able to control the cost reasonably well and performed well,” said Dharmakrishnan.

The company incurred a capex of ₹397 crore during Q1 of this fiscal. It commissioned Line III of Jayanthipuram Plant with a clinker manufacturing capacity of 1.50 million tonnes per annum in the last week of June.

Published on July 27, 2021

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