Shree Cement Ltd plans to invest INR10bn to set up a 2Mta cement plant in the central Indian state of Chattisgarh, its managing director said on Wednesday.
"We are trying to set up a cement plant in Chattisgarh, but we are yet to get the limestone mining lease," H.M. Bangur told Reuters in an interview.
The expansion would be funded through a mix of debt and internal accruals, Bangur said, adding the company is also looking at expanding in other parts of the country.
Its existing plant is in the western state of Rajasthan with an annual capacity of 4.8Mt as of 2006/07.
Bangur said the annual output would reach 6.5Mt in 2007/08 and 8Mt in 2008/09 after setting up of two clinker units and a grinding unit at its existing plant at a cost of INR30bn.
"The expansion will be complete by June 2008," Bangur said.
Bangur said it would be diffcult to sustain the current revenue growth in 2007/08 owing to pressure on prices.
"Lack of rise in cement prices and significant growth in production volumes will make it difficult to sustain the revenue growth in the current fiscal," he said.
Shree Cement posted revenues of INR13bn in 2006/07, representing a 100 per cent growth over the previous fiscal, he said.