KCP to invest Rs 187 cr in hotel, power plant

The BSE-listed KCP Ltd is planning to invest around Rs 187 crore in its proposed diversification into hospitality sector and in setting up a captive power plant, among others.

The company has said it is planning to set up a 2x18 MW captive power plant at the site of its new cement unit-II at Muktyala in Krishna district of Andhra Pradesh. The estimated cost of the project is Rs 164 crore and it has received a term loan of Rs 114 crore from banks.

The basic input for the proposed project, coal, is to be procured under the coal linkage system for which necessary applications have been made and approvals are awaited, according to company's annual report.

Meanwhile, the company has said expansion of cement production undertaken by way of greenfield plant at Muktyala, with a capacity of 1.52 million tonne was partly commissioned in May 2011.

The final commissioning, however, coincided with a recovery in cement prices, which witnessed a downward trend in the earlier part of the year, said the company whose combined capacity would be 2.18 million tonnes now.

Other investments include second phase of expansion of foundry at an estimated cost of Rs 60 crore which is expected to taken up during the second half of the current fiscal.

DIVERSIFICATION
The group is planning a foray into hospitality sector by setting up a hotel in Hyderabad at a cost of Rs 63.02 crore, excluding land. Around Rs 45 crore has already been sanctioned by a bank as term loan for the project, which would have 130 rooms.

“The company has tentatively agreed on preliminary terms for a management contract and operation of the hotel with a  leading international hotel chain. The brand under consideration has models perceived as a business hotel in the upper middle segment with four star category,” the company said.

The company registered a gross turnover of Rs 361.72 crore in 2010-11, a drop of around 12 per cent as compared to Rs 411.75 crore a year ago. The company is into engineering which accounts for 36.13 per cent of the total sales, cement (61.86 per cent), power (0.14 per cent), among others.