The Ramco Cements Ltd has proposed to double the capacity at its Kalavatala integrated cement manufacturing complex in Andhra Pradesh at an outlay of ₹1250 crore. It also plans to invest ₹153 crore in setting up a waste heat recovery system of 10 MW capacity at Ramasamy Raja Nagar Plant in Tamil Nadu.

The company’s Board on Thursday approved the proposal for the establishment of Line II at the Kalavatala Plant located in Kolimigundla Mandal, Nandyal District, Andhra Pradesh. The expansion programme includes setting up a second line to double the clinker capacity to 6.3 MTPA and cement capacity to 3 MTPA with an additional waste heat recovery system (WHRS) capacity of 15 MW

The Kalavatala plant, which is the 5th integrated cement plant of the company, has already reached 100 per cent capacity utilisation. “Considering the successful operation of Line I and demand potential, it has been proposed to establish Line II,” the company said in a statement.

Expansion Plans

The ₹1200 crore expansion will funded through internal accruals and borrowings from banks. This expansion is scheduled to be commissioned in FY26. With this expansion, the aggregate installed capacity of the company would reach 19 MTPA for clinker and 26 MTPA for cement by FY26.

The proposed 10 MW WHRS plant at the Ramasamy Raja Nagar factory complex is to be commissioned by March 2025. The company is in the process of getting the necessary permissions. With the above two expansion plans, the aggregate installed capacity of the company’s WHRS would increase from 43 MW to 68 MW by FY26. Ramco Cement has been establishing WHRS units in its cement plants to minimise greenhouse gas emissions and to lower the environmental footprint in cement production.

While it is likely to incur a capex of ₹390 in this quarter, the capex for FY25 is estimated at ₹1,700 crore including maintenance capex.

The Chennai-headquartered company has registered a 39 increase in its net profit at ₹93 crore for the quarter ended December 31, 2023, when compared with a net profit of ₹67 crore in the year-ago period amid some impact on cement demand due to cyclone Michaung.

EBIDTA increased by 37 per cent to ₹402 crore as against ₹294 crore, helped by a drop in fuel prices. During Q3FY24, the blended fuel consumption per tonne of cement is equivalent to $138 (cost per Kcal: ₹1.64) as against $191 (cost per Kcal: ₹2.43) during Q3FY23. The power and fuel cost per tonne decreased to ₹1386 from ₹1929 a year ago.

The net revenue of the company grew 5 per cent at ₹2113 crore in Q3FY24 as against ₹2018 crore during Q3 of the previous fiscal, aided by an increase in cement volumes at 4 million tonnes (3.64 million tonnes).

The company’s cement capacity utilisation in the December 2023 quarter stood at 74 per cent (82 per cent in September 2023 quarter).