Shree Cement will invest INR450 crore this year to set up clinker and grinding units in Rajasthan, said a senior company executive. "We will fund these projects by internal accruals," said managing director HM Bangur. "We expect a surge in demand early next year by when these units will be functional."
Shree Cement had cash reserves of INR2000 crore in the year ended March 2010. The cement from these two units will cater to the north India market, which has been witnessing a 10% annual growth in consumption of key building material. Shree Cement now produces 12Mta.
Analysts say cement demand in the north and central India is expected to be strong over the medium term. "The Commonwealth Games-related construction will ease by mid year FY11. Thereafter, demand will come from rural infrastructure building initiatives of the government," said Rupesh Sankhe, research analyst with Angel Securities.
Shree Cement recently commissioned two grinding units - one each in Rajasthan and Uttarakhand.
Source: The Economic Times