Shree Cement to invest Rs 10 bn to set up plants in Jharkhand, Odisha

Kolkata-based Shree Cement will invest around Rs 10 billion to set up two grinding units - one each in Jharkhand and Odisha - in the next one year with an eye on enhancing presence in east India, according a top company official.

The company which has a total production capacity of around 40 million tonnes per annum is looking to grow it by 10 per cent growth every year by adding around 4 million tonnes per year.

"Within the next one year we are putting up two grinding units in east India. Roughly Rs 10 billion will be the capital expenditure," Shree Cement Managing Director HM Bangur told PTI.

Elaborating further, he said, "The first one will come up in Jharkhand and the second in Odisha. They will be supported by our unit in Chhattisgarh, the mother clinkerisation unit."

Commenting on the capacity of the two new units, he said it would depend on the type of cement to be ground, although it would be around two million tonnes each.

"If we produce only PPC (Portland Pozzolana Cement), which is the most prevalent, it will come to six million tonnes," he added.

Commenting on the significance of the upcoming units, he said, "In east India also we are a meaningful player and we want to remain that way."

The company has now become the number two player in north India after Ultratech took over Jaypee Cement and Binani Cement, he said.

On the financing of the new projects, Bangur said it will be internally funded.

"We are a very conservative company in the sense that this is a zero-debt company. We would like it to remain that way. Our internal generation should fuel our growth," he added.

Shree Cement has multiple plants spread across Rajasthan, Uttarakhand, Bihar, Haryana, Chhattisgarh and Uttar Pradesh.

About a week ago, Bangur said the company had also started its new unit in Karnataka.

"It will take three years to ramp up. After that we will look at more units," he said.

On the company's growth outlook, he said, "Our total existing capacity is around 40 million tonnes annually. We would like it to grow at 10 per cent every year, that is around 4 million tonne per year."

When asked if Shree Cement was looking for acquisitions, he replied in the affirmative but said it had been unable to clinch a deal due to mismatch between the aggressiveness in the market and the company's conservativeness.

"The price at which it is sold and the price I want to get, they don't match," Bangur said.