The Hindu Business Line : India Cements upbeat on prospects

Chennai, July 31 India Cements, which has announced a dividend for 2006-07 after a gap of five years, has reported a record performance in the first quarter of 2007-08.

The best is yet to come with cement prices buoyant and production capacity set to grow by 65 per cent over the next year and a half, says Mr N. Srinivasan, Vice-Chairman and Managing Director.

Addressing a press conference here, he said that the company’s production capacity of nine million tonnes a year would increase to 15 mt over the next 18 months.

The additional six mt of production comes at a cost of Rs 800 crore and holds the key to the “future success of the company”.

Such an addition from a new plant would cost three times more, Mr Srinivasan said.

The increase would be from a new cement line of 1.2 mt a year at its Malkapur factory funded through internal accruals. This unit was formerly with Visaka Industries, which has been merged, with India Cements with effect from July 2006. An ongoing upgrade and optimisation programme at its cement mills will take the current capacity to 12.5 mt.

With the company stabilising its expansion and upgradation plans at its existing facilities, it would now consider taking up the planned cement plant in Himachal Pradesh.

It is also actively following up on mining lease in Rajasthan and Madhya Pradesh to set up production facilities, he said.

The company has declared a dividend of Re 1 (10 per cent) an equity share of Rs 10 for 2006-07.

Following the merger of Visaka, its net profit for the year stood at Rs 478.83 crore on net sales of Rs 2,610.75 crore. In the previous year, its net profit was Rs 45.31 crore on sales of Rs 1,829.44 crore.

India Cements’ EBIDTA has grown to 38.54 per cent in the first quarter of 2007-08.

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