Madras Cements to invest Rs 800 cr

Madras Cements Ltd is planning to invest around Rs 800 crore to increase the manufacturing capacity of its Ariyalur plant in Tamil Nadu. The company has also proposed to set up a 65-Mw coal-based power plant for captive purpose.

AV Dharmakrishnan, executive director – finance, Madras Cements, said the capacity at Ariyalur would be increased to 4.5 million tonnes from 2 million tonnes by April 2011. “The total investment in the expansion and power plant will be around Rs 800 crore,” he said. The project would be funded through debt and internal accruals. 

Madras Cements, the flagship company of Ramco Group, currently enjoys a 22 per cent market share in Tamil Nadu. “Once the expansion is complete, we will look at neighbouring states of Karnataka and Kerala,” said Dharmakrishnan.

The company is likely to close the current fiscal with a turnover of Rs 3,000 crore, an increase of 17 per cent over last year’s Rs 2,545 crore. “By 2011-12, our turnover will increase by another Rs 1,000 crore,” he said.

It currently has a capacity to produce around 10 million tonne cement per annum. “We are also exporting in smaller quantity to Sri Lanka. If the price in the export market is good, we will scale it up,” added Dharmakrishnan.

Cement majors are investing around Rs 3,000 crore in Tamil Nadu to scale up their capacity and to set up greenfield projects. The existing manufacturing capacity in the state is estimated to be around 45 million tonnes. Another eight million tonnes is being added.

Major players, which are in the process of scaling up and setting up their projects in the state, include Dalmia Cements, Chettinad Cements, India Cements, ACC and Madras Cements.