Sanghi Cement to spread its wings wide
Sanghi Industries Ltd has ambitious overseas plans. It is targeting West Asia, Sri Lanka and European markets (Italy and Spain) to reduce its geographical risk.
The company currently serves the regions of Kutch and south Gujarat, also plans to expand to Karnataka, Kerala and Maharashtra.
Gujarat, Maharashtra, Karnataka and Kerala accounted for 8%, 6%, 12% and 7%, respectively of the total domestic consumption during the FY02-FY07 period.
The current sales mix of Sanghi includes clinker and ordinary portland cement.
It plans to introduce blended cement going ahead. This is mainly because of its foray into newer markets where demand for Portland Pozzolana cement is abundant.
Sanghi would also commission a 120MW captive thermal power plant at a cost of Rs 240 crore by early 2008-09. The first phase, comprising 60MW, is likely to be commissioned by July 2008.
Alok Sanghi, director, Sanghi Industries told DNA Money, "Once commissioned, it will bring down the power cost from Rs 4.5 per unit to Rs 2.4 per unit, translating into savings of Rs 200 per tonne."
It is also setting up a clinker unit of 3.3Mta and a cement grinding unit of 5.15Mta, both adjacent to existing units. Its current facilities include a 2.6Mta clinker unit and a 3.3Mta cement grinding unit.
Sanghi further said that the total capex planned for this purpose, expected to be commissioned by 2009, is around Rs 1,200 crore.
At present, it has a market share of around 16% in Gujarat and is a market leader in its home district Kutch with a 50% market share.
Analyst Novonil Guha of Prabhudas Lilladher said in a note to clients on October 19 that Sanghi would raise about Rs 200 crore from the market, at about 30% premium to the current market price, leading to dilution of about 8.5% equity next fiscal.
Published under Cement News
