Kesoram to spend over Rs 1000 cr for capacity augmentation
Kolkata, Jun 29 (UNI) Kesoram Industries Ltd plans to spend over Rs 1,000 crore in the next two years to augment the capacity of its cement and tyre divisions, its chairman B K Birla said today.
" We will initially focus on the cement division," he said.
Speaking at the AGM, he said the company has " small plans for the tyre division." Meanwhile, a detailed roadmap for the next two years has already been chalked out for all the B K Birla Group of companies.
"Everything we are planing is only for the next two years," Birla said.
Kesoram has plans to set up a new plant with a capacity of producing 5 million tonne per annum of cement and clinker near its existing unit within the next two years, Birla said.
Birla said tyre production of the company would also be increased by 30 per cent over the next two years.
"We would focus on car tyres," he added.
Kesoram Industries is still committed to selling its heavy chemicals business.
"The market has been changed over the last few years. There is no good buyer available at the moment," Birla said.
Birla said the capex earmarked, will be taken as loan from the bankers.
"We do not have any plan to go for another public issue," he added.
"A Rs 425 crore project has already been started to increase the capacity to 5 million tonne by December 2006," the company's director and secretary S K Parik said.
It is also setting up a 17.5 MW thermal power plant for captive use, he added.
Parik said the plan for setting up the new cement plant will be placed before the shareholders of the company next year.
Kesoram registered a 36 per cent growth in net profit in 2005-06 at Rs 45.6 crore from Rs 33.51 crore registered in 2004-05.
Profit before tax jumped by 86 per cent from 43.61 crore to Rs 80.92 crore during the financial year.
Net sales of the company has increased by 9.87 per cent at Rs 1877.81 crore in 2005-06 from Rs 1709.01 crore in 2004-05.
Total income increased by 13 per cent to Rs 1931.55 crore compared to Rs 1780.38 crore in 2004-05.
Contribution of the tyres division, known in the market as Birla Tyres, continued to be the highest.
From Rs 752.29 crore in 2004-05, it increased to Rs 867.50 crore.
Earnings of cement division increased to Rs 734.93 crore from Rs 665.77 crore.
The 86-year-old B K Birla said, "In my 62 years chairmanship in the company, I have attended 58 AGMs, but now on it depends on the condition of my health." He, however, did not comment on who would be the chairman of the Group after him.
UNI TJP KK/src1627