Saurashtra Cement plans 1.1Mt capacity expansion

Saurashtra Cement plans 1.1Mt capacity expansion
Published: 17 January 2005

Saurashtra Cement, belonging to the Mehta Group, has expansion plans to the tune of Rs 240 crore, which are currently under implementation. The group has similar plans of Rs 75 crore for its other cement entity, Gujarat Sidhee Cement (GSC). Saurashtra Cement and GSC managing director, MS Gilotra, told reporters, "We are expanding Saurashtra Cement’s capacity by 1.1Mt over the existing 1.3Mt. We will also install a 25 mega watt power plant and have other improvement plans for miscellaneous energy efficiency." GSC, having a capacity of 1.2Mt, is also installing a captive power plant, constructing a private jetty for exports and coastal movement, along with an optimisation exercise of Rs 30 crore. All this is a part of the Rs 75 crore expansion plan. Mr Gilotra is upbeat about the cement industry’s prospects in 2005 and is expecting a growth of 7-9 per cent. 

He added that his company will also benefit from the improvement in markets, even as the burden of higher debts and financing costs, higher cost of electricity and fuel, will continue to pull down the bottom line till the completion of projects now in the pipeline. GSC is currently under a rehabilitation scheme of BIFR, which is expected to be completed in another 12-18 months. In 2004 the company had a market share of around 15 per cent share in Gujarat. About 50 per cent of its turnover has been from exports, as demand in Gujarat remained at about 50 per cent of the total manufacturing capacity in the state. These levels are likely to continue with a similar ratio in 2005, according to Mr Gilotra. When asked about a possibility of a merger or joint venture with a bigger cement player, Mr Gilotra informed that while the company is planning to raise equity in its companies for completion of the capital expenditure programme, they are not in talks with any larger company in the region for such a purpose.