The Rs 2,500-crore joint venture cement plant of Hyderabad-based Sagar Cements Ltd and Vicat Group of France is likely to commence operations next year. “The plant work is progressing on schedule. We will be commencing production of Phase I by June 2012,'' Mr S. Sreekanth Reddy, Executive Director, Sagar Cements Ltd, told Business Line .
Phase I of the plant, coming up at Chatrasal, in Gulbarga district of Karnataka, would involve an investment of Rs 1,650 crore.
The financial closure — in the form of Rs 1,000-crore debt and Rs 650-crore equity has already been completed.
“The cement production capacity of the first phase will be 2.5 million tonnes. The total capacity including second phase would be at 5.5 million tonnes by 2014,'' Mr Reddy added.
SAGAR CEMENTS
On Sagar Cements performance this year, Mr Reddy said the company's performance would be as good as last year and the same growth in topline and bottomline could be maintained.
“On a relative term, everything including volumes, remained the same. The only difference, however, is 20-30 per cent increase in costs,'' he said.
For the year ended March 31, 2010, the company's net profit increased 16.2 per cent to Rs 19.12 crore. The revenue went up to Rs 479.57 crore from Rs 306.54 crore in the year-ago period.
Sagar had also repaid a debt of about Rs 90 crore and has over Rs 130-crore debt as on date.
INDUSTRY
The industry scenario continues to be ‘tight' with surplus supply, Mr Reddy said. The expected consolidation is also likely to be delayed.
“At present, the sellers don't want to sell at what they think is a lower price. Given the tough situation in the industry, high valuations are not happening,'' he said.
Sagar Cements' scrip gained 2.92 per cent to end at Rs 142.90 on the Bombay Stock Exchange on Tuesday.