Gujarat-based cement player Sanghi plans to double capacity

Company has only recently expanded its capacity by 1.2 mtpa to 4.1 mtpa from an earlier 2.9 mtpa

Gujarat-based cement player Sanghi Industries is planning to double its production capacity over the next three to four years to 8.2 million tonnes per annum (mtpa) with an investment of around Rs 1,200-1,500 crore.

If need be, the company is also open to diluting some equity in the long run to raise money for future expansion.

The company, which runs a cement plant in Kutch, Gujarat, has only recently expanded its capacity by 1.2 mtpa to 4.1 mtpa from an earlier 2.9 mtpa It has also started work on commissioning a 15 MW waste heat recovery plant which would be commissioned within the next 15 months. As of now, it has a captive power capacity of 63 MW.

Talking to Business Standard, Alok Sanghi, director, Sanghi Industries said, "This is the bottom of the cement cycle in India, and we are planning to bring in new capacity over the next few years, by when the demand would be up. As such, we have sold 2.5 mt last year as against a capacity of 29 mt, and hence our capacity utilisation levels are high."

Overall capacity utilisation in the cement industry is around 69-70% now, with some over capacity in South, Sanghi said adding that if one takes the southern market out, the capacity utilisation would be higher at 76%.

Sanghi Industries, which enjoys a 7% market share in Mumbai, 4% in south-west Rajasthan and 11% in Gujarat plans to raise its market shares in these markets, as well as focussing on Kerala market. Sanghi claimed that the cost of transporting cement via land route from Andhra Pradesh and Tamil Nadu to Kerala is higher than Sanghi transporting it via sea route.