Land issues halt Shree Cement’s expansion plans

Land issues halt Shree Cement’s expansion plans
Published: 18 November 2009

Land acquisition issues have halted the pace of north-based Shree Cement in its aim to become a pan-India player.
 
The company, which had not ventured out of Rajasthan so far, obtained licences for mining limestone in three states. However, the company says land acquisition is proving a problem.
 
Currently with a capacity of 9.5Mta, it is undergoing expansion worth Rs 450 crore (Rs 4.5 billion) to add another 2Mt by June 2010. However, the entire capacity is located in Rajasthan.
 
"We have got the limestone mining licence in Rajasthan, Karnataka and Chhattisgarh. However, land acquisition is taking a longer time. The process of acquiring land may take up to another three years from now," said Hari Mohan Bangur, chairman and managing director.
 
The company, which had a cash flow of Rs 850 crore (Rs 8.5 billion) in the first half of the current financial year, is trying to venture into other parts of the country, as high concentration of capacity in one region may prove risky, due to the price differentiation of cement in various parts of the country.
 
"Even if a single farmer refuses to give his land, the project gets delayed," he added.
 
"Once we achieve close to 12Mt of cement making capacity, we have no plans to take it further up for at least the next two years. We will keep our capacity utilisation at 115-120 per cent, so that our plants can produce 14Mt," he said.