The Indian cement industry is the second largest in the world, and keeps getting larger. The following three major investments were recently announced, and no doubt more will be close behind.
Dalmia Cement Bharat Ltd
This company is reportedly the second largest cement manufacturer in the southern region, and is seeking to expand into other areas of the country by establishing new plants and warehouses in strategic areas. As well as increasing capacity, this will also help to reduce freight costs, which can be exorbitant.
Spokesperson for the company, R Gurumoorthy, has told the national press that Dalmia Cement may invest as much as US$ 1 billion over the next several years in capacity expansion across the country, starting this fiscal in Meghalaya and Himachal Pradesh. In one interview, Gurumoorthy states: “This fiscal is all about de-bottlenecking”.
Shree Cement
Shree has given details of its plans to enter the power generation business with a 750 MW coal-fired power plant on the western coast of India. According to reports, the Rs.3000 crore project will be largely financed by internal cash flow and will remain under Shree Cement without equity dilution. The company already operates smaller power generation units across the country.
Whilst the company’s CEO, H M Bangur, has said that, in the short term, power will be the focus rather than cement, Shree Cement is also expanding capacity by adding grinding units at Roorkee (Uttarakhand) and Suratgarh (Rajasthan), bringing the company’s total cement capacity to 12 million tpa. The company is also planning a 2 million tpa complete cement plant in Karnataka and another in Chhattisgarh of unnamed capacity.
ABG Group
Meanwhile, ABG Group has announced plans to set up a 6 million t cement plant by 2010, at an investment cost of Rs.2000 crore. The plant will be funded at a 2:1 debt-equity ratio, with IFCI already taking up a 14% stake in the project. ABG Group, which has recently completed an Rs.1650 crore shipyard and is predominantly a shipbuilding business, is also considering acquiring some small cement producers, but has announced no firm plans on this topic as yet. Like many other cement manufacturers, the company is investing in a 100 MW thermal power project in nearby Gujarat to supply the new cement plant.