Priyadarshini Cement To Treble Capacity

Priyadarshini Cement (PCL), where Gujarat Ambuja holds five per cent stake, is planning to increase the capacity of its cement plant to 1.8 million tonne. Located at Ramapuram in Nalgonda district of Andhra Pradesh, the expansion is estimated to cost Rs 380 crore, top financial institution sources stated.

Priyadarshini can produce 0.6 million tonne of ordinary portland cement at the moment. The expansion will add 1.2 million tonne more and will consist of, both, clinker and cement. It will have an installed capacity of manufacturing about 1.25 mtpa of clinker and 1.25 mtpa of cement. The surplus cement grinding capacity of the existing plant would be used to grind the excess clinker available from the proposed plant.

The proposed capacity augmentation is expected to be financed by rights issue of Rs 58 crore, unsecured loans from promoters to the tune of Rs 16 crore, a preference share capital of Rs 24 crore and internal accruals close to Rs 21 crore.

The company will also go in for lease finance to the extent of Rs 10 crore and a rupee loan of Rs 250 crore.

The management of PCL has approached financial institutions for rupee loan of Rs 250 crore as well as the equipment lease finance of Rs 10 crore.

PCL intends to target its enhanced capacity for the southern region. According to a recent study conducted by IDBI, the southern parts of India will experience aggregate cement deficit of 3.71 million tonne per annum by the turn of this century.

Considering the growing demand for cement, PCL aims to sell 60 per cent of its capacity in Andhra Pradesh, 16 per cent in Karnataka, 14 per cent in Tamil Nadu, 7 per cent in Kerala and just 3 per cent is targeted in Maharashtra.

Besides augmenting cement capacity, the PCL management has also proposed setting up of DG set to provide 10 mw power for its cement plants. This DG set is expected to meet about 85 per cent of power requirement of the proposed expansion scheme of the company.

For efficient coal and cement handling as well as speedy evacuation of its products, PCL has also incorporated construction of a railway siding near the cement plant.

Priyadarshini was in the news last year when cement major Gujarat Ambuja picked up five per cent equity in it, prompting speculation of a takeover bid. The Priyadarshini promoters hotly refuted it and pointed out that they had nearly 51 per cent in the company.