Vasavadatta Cement to enhance capacity

Vasavadatta Cement, an arm of Kesoram Industries Ltd, is planning to increase annual production capacity by two million tonnes.

The capacity addition is likely to happen at its plants in Sedam, Karnataka, which now has six million tonnes of cement production capacity, according to Mr K.C. Jain, Senior President, Vasavadatta Cement.

“The capacity addition will require Rs 1,000 crore, which will be mobilised through internal accruals and loans. We are looking for additional land,” Mr Jain said after inaugurating a cement packing plant at Bachpalli here on Sunday.

The proposed expansion might take about two years, he added.

The cement packing plant was set up with a cost of Rs 10 crore. it has the capacity to pack 60,000 tonnes of cement a month of the Birla Shakti brand.

“This is basically for the AP market. We will bring ordinary Portland cement from Karnataka to be packaged here,” he said.

The bags, which would be laminated from inside, would cost more — close to Rs 7 against Rs 2.50 for a normal bag.

“We will be setting up one more similar plant in Sedam in next six months,” he added.

Vasavadatta mainly caters to markets in Maharashtra, Karnataka and Andhra Pradesh.

On the industry situation, Mr Jain said the demand growth was ‘very sluggish'.

“During 2010-11, demand had grown by about 5 per cent against 12 per cent in the previous year. In the present financial year we expect it to increase by 8 per cent,” he added.

In Andhra Pradesh, demand had come down significantly due to ‘prevailing political uncertainty which adversely impact construction'.

Cement prices might come down by about Rs 10 in the ensuing monsoon season, Mr Jain added.

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