Ramco Cements Ltd is set to complete its ongoing expansion projects by the end of 2020 which will take its capacity up from 12.5 million tonnes (mt) per annum to 20 mt.
Among top two leading south Indian cement manufacturers, Ramco, which is deploying a capital expenditure of over ₹3,430 crore, expects its revenues to shoot up from ₹5,250 crore to over ₹7,500 by 2021-2022.
Balaji K Moorthy, Executive Director (Marketing), Ramco Cements, said “ We are functioning at about 90 per cent capacity utilisation and are in the process of commissioning several projects which will take the total capacity up from 12.5 MT to 20 MT. This includes a 3.15 mt greenfield cement pant in Kalavatla in Kurnool district with an investment of ₹1,500 crore.”
This plant will be commissioned by the end of 2020 and take the installed capacity to 10 mtpa in Andhra Pradesh. This will also make Ramco the largest cement manufacturer in the State, he said.
Expansion projects
He said the company is investing ₹2,500 crore in grinding capacity in AP and the total capex including other projects would be around ₹3,430 crore.
The expansion projects include that at the Kurnool plant, a grinding unit in Visakhapatnam, greenfield plant in Odisha, commissioning and expansion plant in West Bengal.
Interacting after the launch of Ramco Supercrete Cementin Andhra Pradesh and Telangana, the Moorthy said that the input costs for making cement have gone up and there is likelihood of prices firming up in the near term. However, he made it clear that it was not possible to say with certainty when this hike could happen.
Maintaining a positive outlook for the cement sector and potential for the growth in the industry given the government focus on infrastucture and housing, he said, of the 440 mtpa of cement production capacity in the country, South India accounts for about 160 mtpa. While North has 93 mt, West 59 mt, Central India 93 mt and East India accounts for 73 mt. However, the annual consumption at the all India level is at 68 per cent and in South India it is 66 per cent.
He said that the demand continues to go up across all States in the South over the past seven years barring Tamil Nadu, where it has been stagnant.
Mentioning about the cement demand supply situation, he said that the sector continues to grow at over 6-8 per cent but Ramco bucks that trend to grow at a much higher rate. Therefore, we have been investing in new capacity expansion, he said.