Sagar Cements to commission ₹120-crore railway line in July

The private railway line of Sagar Cements Ltd being laid with an investment of ₹120 crore is expected to be commercially operational next month.

According to its Executive Director S Sreekanth Reddy, the company had already received its first train and full commercial operations will begin after safety checks by end of July.

The seven-km line, which is expected to improve Sagar’s market reach and cut freight costs, will connect the company’s plant near Matampally in Nalgonda district of Andhra Pradesh, with the main railway line.

The savings will be in the form of cheaper inward and outward freight.

“We expect ₹10-₹12 crore savings per annum with the inward freight,’’ Reddy said.

The savings in the outward freight will depend on the volumes of despatch and also varies accordingly.

BMM deal

The Hyderabad-based Sagar Cements is also working on closing the deal of BMM acquisition. In September last year, it announced the plan to acquire the company for an enterprise value of ₹540 crore.

BMM has limestone reserves of around 155 million tonnes, besides a captive power plant of 25 MW.

Sagar had already paid close to ₹150 crore advance, including ₹25 crore as equity advance and ₹125 crore as an unsecured loan.

It has just started to get traded cement from them and the ramp-up is on.

In terms of volumes from BMM, the company had done about 15,000 tonnes last month. “But once it gets stabilised, we hope to do anywhere between 35,000 and 40,000 tonnes,’’ Reddy said.

BMM Cements has a one-million-tonne capacity plant at Gudipadu near Tadipatri in Anantapur district of Andhra Pradesh.

After the completion of the process, the service market dynamics will change.

The produce from the Mattampally plant of Sagar will be moving primarily to Maharashtra, Odisha and Chhattisgarh.

COMMENT NOW