Dalmia Cement to increase capacity by 18% with new plant

Company has raised a debt of Rs 900 cr, while the balance Rs 400 cr has been contributed by way of equity

Dalmia Cement (Bharat) Ltd, a Dalmia Bharat Group company and India's fourth largest cement maker, is set to expand its installed capacity by 18 per cent to 19 million tonnes with the completion of its new plant in Karnataka. The company is in advanced stages of commissioning its new cement plant at Yadawad near Belgaum in north Karnataka by February next year.

The company is investing Rs 1,300 crore for the greenfield plant, which will have an annual capacity of 2.5 million tonnes, Vipin Agarwal, chief executive officer, DCBL said. The company has raised a debt of Rs 900 crore, while the balance Rs 400 crore has been contributed by way of equity.

"Three years ago, we were considered as predominantly south-based cement maker. But, we have added a plant in northeast and eastern India in the last couple of years. We are in the process of commissioning new plant in Belgaum, which will cater to markets in Maharashtra and Goa. We have now become the fourth largest cement maker. We are now looking at opportunities in Central and Northern India to become a real pan-India player by next fiscal," Agarwal told Business Standard.

He said, the company is looking to set up new plants in Madhya Pradesh and Rajasthan. "Our next plan is to increase our capacity by another 3 million tonnes to take the total capacity to 21 million tonnes in the next financial year," he said.

The company also plans to set up its second plant in Karnataka at Gulbarga in north Karnataka. The Gulbarga plant will also have a capacity of 2.5 million tonnes, he said, adding: "We are yet to work out the exact plan for Gulbarga. It is too premature to talk about it. We have applied to the government of Karnataka for a mining lease and we are waiting for the allotment."

DCBL is also expanding its retail presence in the country by launching a new brand 'Dalmia Ultra' in southern markets. It is also aiming to expand its offerings in the special cement segment where it claims to be only one of the two players in the country. Its special cement is sold to Indian Railways, ONGC, Oil India, Reliance among others. Dalmia also claims to be the first company to develop a cement sleeper for Indian Railways in 1972. In FY13, it sold 300,000 tonnes of special cement, which it plans to grow further this year.

For the present year, the company is aiming at a double-digit growth despite weak demand for cement in the first quarter. It sold 1.34 million tonnes of cement in the first quarter ended June 2013 as against 1.40 million tonnes in the corresponding period last year, showing a decline of 4.2 per cent. Presently, DCBL has a turnover of Rs 5,272 crore including OCL India Ltd, its subsidiary. It has two manufacturing plants in Tamil Nadu, one in Andhra Pradesh and three in North East.