Madras Cements Finalises Plan For One Mtpa Unit

The company has worked out a project cost of around Rs 300 crores, of which ICICI has given approval for Rs 150 crore of debt, while Bank of India will provide another Rs 50 crore. The institution will subscribe to a debenture issue of 8-year maturity with a coupon of 11.5 per cent.

The balance amount will be financed through internal accruals, the company has told analysts. The new unit will be commissioned around March 2000.

The company has a slag grinding unit with a capacity of 1.6 million tonne in Jayanthipuram, Andhra Pradesh, while the other plant in Tamil Nadu has a 0.8 million tonne capacity.

The company has been facing strong competition in the region from rivals Indian Cement and Larsen & Toubro, while several others like Gujarat Ambuja and Grasim are planning to increase their presence in the region.

The company's slag grinding unit at Jayanthipuram for manufacturing blended cement was commissioned last year. For slag supply the company has signed a long term pact with Rashtriya Ispat Nigam Ltd.

The slag cement brand -- Ramco Super Steel Cement -- launched at Hyderabad has seen a positive response. The blended cement brand 'Ramco Super Grade' (fly ash-based) has bagged market popularity during the last fiscal, analysts said.

The company's blended cement sale increased to 2.21 million tonne last year as compared with 1.6 million tonne in the previous year.

Madras Cement's ready mix concrete (RMC) plant at Vengaivasal near Chennai has seen favourable market response. The second RMC plant at Vichoor produced 21,093 cubic metres of concrete last year, aggregating to a turnover of Rs 4.12 crore.

The company has in recent months gone on an overdrive to reduce its overall costs measures to safeguard its profitability, as the cement prices continue to be competitive.