Cement major India Cements Ltd said that it may sell its stake in Jagati Publications, which is owned by Y Jagan Mohan Reddy. The company had earlier sold its stake in Bharati Cements, which was owned by the same group, and made a profit of around Rs 35 crore.
N Srinivasan, vice chairman, India Cements, while addressing company's shareholders at Chennai today said that "we made a profit by selling our stake in Bharati Cements, in due course we will also sell our stake in Jagati Publications".
Andhra Pradesh-based Jagati Publications is one of the largest media houses in South India and owns Sakshi TV and Sakshi Newspaper among other businesses.
A senior India Cements official said, "It was not that we were interested in publication business. We were only interested in cement. However, they offered all three as bouquet. Overall our company has invested around Rs 130-135 crore".
The company's Rs 40 crore investment in the publication house is on the radar of the Central Bureau of Investigation, which has alleged that India Cements pumped money into Jagan Mohan Reddy's firms in return for business favours, according to media reports.
On Competition Commission of India (CCI's) penalty on the company, Srinivasan said, "We do not agree with the penalty and we don't agree that we indulged in any activity which was mentioned in the order".
This is just an order passed and it is not finality and a final judgment on the issue, which will not sustain, said Srinivasan.
India Cements is among the 11 cement firms that were penalised around Rs 6,300 crore by CCI over alleged cartelisation.
Commenting about the industry during the year under review, the growth in cement industry demand improved to 6.60% as against a low of 4.70%, a year ago.
Demand growth was better in regions which saw brisk activity in infrastructure and housing, riding on the back of progressive policies of state governments, said
The western region recorded a 13.30% growth, while north and central recorded 11 and 9.30% respectively. The east recorded a poor 2.90% demand growth, while the south demand was primarily due to lack of infrastructure and housing developments in Andhra Pradesh and Karnataka.
In view of the country wide additional capacity creation much ahead od demand, the All India capacity utilisation was slightly lower at 74.37% as against 74.93% a year ago. In South, however it fell to 63% from 65%.
In the backdrop of the All India demand for cement being less than satisfactory at 6.5% in 2011-12, the negative growth in the south for the first nine months of 2011-12, adverse market conditions such as erratic supply of power in Andhra Pradesh and Tamil Nadu, reduced availability of coal from Singareni Collieries ltd cost and inflationary pressures and increase in wages, the company's performance can be considered to be extremely satisfactory.
Company's gross turn over was around Rs 4222.69 core from Rs 3540.33 crore up by 19%.
He added, company's 48 MW power plant at Sankarnagar has been commissioned and is expected to go full stream ahead in 2012-13.
Further the expanded capacity of the Chilamkur plant and the second line at Malkapur have stabised and all these operational efficiencies are expected to play an important role in enhancing the performance and profits of the company in 2012-13, said Srinivasan.
Over the last 12 months the country has been witnessing to a plethora scams giving the opposition more than enough ammunition to corner the Government on all sides. Coalition constrains also booged down the Government, resulting in policy paralysis in respect of big ticket reforms.
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