Business Standard

Madras Cements to invest Rs 360 cr

The new unit will come up at Visakhapatnam and is expected to be commissioned in the second quarter of 2014-15

T E Narasimhan Chennai
Madras Cements plans to invest Rs 360 crore to set up a new grinding unit in the neighbouring Andhra Pradesh and another Rs 55 crore to increase its power generation capacity.

The new unit will come up at Visakhapatnam and is expected to be commissioned in the second quarter of 2014-15, according to the company's annual report 2012-13. It was further stated that the necessary clinker for this plant would be transported from its Jayanthipuram plant.

The output from this plant would be marketed in coastal Andhra Pradesh, particularly Vizag, and in Odisha and Chattisgarh.The company, in the recent past, had established three grinding units near the fly ash availability areas and the major cement consumption areas.
 

This has helped the company in economising the cost of transportation and to better service the markets. In line with that, the company is now planning to install its fourth grinding unit.

On its outlook, the company said the cement industry was expected to grow 8 per cent in 2013-14. The demand increase is expected to be sustained due to the government spending on infrastructure projects, rural housing and development and the general increase in the economic activity.

However, the excess capacity created by the cement industry during the past years will have an impact on the production of cement and sales realisation. The capacity-demand mismatch is expected to come down over a period of next few years, improving the capacity utilisation of the industry. The company would continue to focus on cost control measures and strategic decisions on production and distribution to protect and improve its profitability.

To increase power generation
At Ariyalur, Tamil Nadu, the company had commissioned a 20-Mw thermal power plant. With this, the capacity of the captive thermal power generation at Ariyalur had risen to 60-Mw. At Ramasamy Raja Nagar, it has commissioned a 25-Mw thermal power plant.

"Due to an acute power shortage, it would be advantageous to invest further in power generation," said the company. Accordingly, it is proposed to enhance the capacity of the thermal power plants at Alathiyur, Jayanthipuram and Ariyalur by adding one turbine each of 6-Mw capacity at a total cost of Rs 55-crore.

The company has continuously invested in captive power generation. The investments in wind farms, thermal power plants and heavy fuel oil-based power generating sets have ensured that the company has a variety of captive sources of power, besides getting grid power. The liberalisation of the power sector will enable the company to utilise these captive sources in a most advantageous manner for self-consumption as well as sale of power under the Intra -State Open Access Policy. The usage of the alternate sources of power would be decided in a cost judicious manner, as power is one of the most important elements in the production of cement, said the company.

Name change
The company propose to change its name from Madras Cements Limited to 'The Ramco Cements'. Ramco is the brand name under which the company's products are sold. The name - The Ramco Cements Limited - will make it easy to identify the name of the company with the brand under which the company's cement is sold, said the company and its board is of the opinion that identification of the company's name with the brand name will be advantageous in the long run in brand building.

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First Published: Jul 01 2013 | 8:29 PM IST

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