Two more plants planned in cement-saturated South

South India has a huge capacity overhang with 150 mn tonnes against a total demand of 60 mn tonnes

Last Updated : Jun 14 2017 | 5:59 PM IST

Notwithstanding the surplus capacity in south India, two South Indian cement manufacturing companies have proposed to set up new plants in Andhra Pradesh.

Tamil Nadu-based Chettinad Cement Corporation Private Limited and KCP Limited are planning to invest Rs 1,350 crore and Rs 531 crore respectively to establish their new units in the state.

The state investment promotion board headed by Andhra Pradesh chief minister N Chandrababu Naidu has cleared six investment proposals, including these two, involving a total investment commitment of Rs 3,303 crore.

According to the government, Chettinad will set up a cement grinding unit on 75 acres and a manufacturing plant on 1,000 acres of land in Vizag and Guntur districts respectively. The mega project will start production in March 2019.

KCP Limited will be setting up a unit on 100 acres of land in Krishna district with the first phase scheduled to start operations in a year's time.

The cement industry in South India in general, and in Telangana and Andhra Pradesh in particular, is facing a huge capacity overhang with an installed base of around 150 million tonnes against a total demand of around 60 million tonnes. An additional 20 million tonnes goes to the neighboring markets in the eastern and western parts of the country from here, according to the industry representatives.

The two Telugu-speaking states together possess more than 30 per cent of the country's limestone reserves, making them attractive destinations for cement companies.

Among the other major investment proposals, Hyderabad-based Rain Group, which also has cement manufacturing operations, has expressed interest in establishing a calcined petroleum coke plant, a cement grinding unit, an R&D facility and a waste heat recovery power plant at Achutapuram SEZ in Visakhapatnam district, the government said. The company proposes to invest Rs 1,096 crore in these projects.