India’s Shree Cement Ltd. has speeded up its expansion project and will complete it two years ahead of schedule to meet the widening demand-supply gap in northern India, a senior official said.
The expansion to 10Mt from the present 4.1Mt would be executed by March 2008 instead of 2010, Managing Director Hari Mohan Bangur told Reuters on Friday.
Three additional captive power plants of 18 megawatts each would also be operational by then, he added. This would take the company’s power capacity to 99MW from 45MW, Bangur said.
"There is a tremendous demand supply gap in the market and our cash flows are also good," he said citing reasons for advancing the 12bn rupee expansion plans.
He said cement demand in northern India had been registering compounded annual growth of 11 percent for two years against 8 percent in the years before.
"With economic growth, the latent need is converting into demand," he said adding that rural housing is the next big sector after roads.
"We want to increase our share in the northern market to 20 percent by this expansion from the present 13 percent," he said. Thereafter, the company might decide to expand to other regions.
Shree plans to begin production on the new lines in April 2008.
Demand for cement has been growing in Asia’s fourth-largest economy, as it builds roads, homes, malls and factories to gear up for corporate expansion and wealthier households.