Binani Cements Ltd, the flagship company of Binani Industries Ltd, plans to nearly double production over the next three to four years by expanding current capacity and developing new projects in Gujarat and Orissa, the company’s deputy managing director said.
India’s cement sector is growing at breakneck speed, spurred by a rapid expansion in infrastructure projects as the country builds more bridges, airports and roads to fuel double-digit economic growth.
The cement sector is expected to maintain its average annual growth of 9% for the next few years, creating massive demand that far exceeds supply. According to industry estimates, India is expected to produce around 165 million tons of cement in 2007, while demand is around 175 million tons.
"By end of this fiscalyear we plan to raise our production to six million tons from existing operations in Rajasthan. Production from our new unit in Gujarat and from our planned venture in Orissa will push up total output to 12Mt over the next four years," Vinod Juneja said.
The company’s 3Mta cement plant in Gujarat will come into operation by 2009.
The company has also submitted an expression of interest for setting up a 2.5Mt to 3Mt integrated cement plant in Angul in Orissa to use the fly-ash produced by state-run National Aluminum Co Ltd., or Nalco. It has factored winning the bid into its expansion forecast.
"The Orissa plant will give us a strategic hold in the fast growing eastern Indian provinces of Jharkhand, West Bengal and Orissa, where major steel companies like Essar, Posco and Tatas are planning steel plants. This would spur construction activity," Juneja said.
He said Binani Cement plans to invest around INR8 billion in the new cement plant in Orissa if it wins the bid from Nalco.