Cement Cos spruce up investment to tap growing demand

New Delhi, Aug 6 (UNI) The increasing demand for infrastructure activities like development of highways, IT and ITES parks, housing and irrigation particularly in South India, has left cement companies scurrying to spruce up production and chalk out elaborate investment plans, to leverage the growing industry.

The Housing and construction boom which led to a sharp hike in retail prices, led to cement companies registering an average growth of 95 per cent in net profits in the fourth quarter of FY06, with major cement firms witnessing a 32 per cent hike in their sales volume, a report said.

Among companies that are keen to tap the boom in the industry, which posted a 10 per cent growth in FY06 from last year, Madras Cements plans to spend Rs 1,052 crore on increasing its capacity by four million tonnes (mt) in 2007-2008.

Of the total 1,052 crore investment, the company will pump in Rs 613 crore on a new two mt annual capacity plant near Ariyalur in Tamil Nadu, and Rs 439 crore into an additional clinker facility at its existing plant in Jayanthipuram in Andhra Pradesh.

Total production registered by the cement industry went up 11 per cent to 142 mt from 128 mt last year, with plants in South India operating with a capacity utilisation of 95 per cent.

Production in the Southern region grew by 15 per cent followed by the Northern region (11 per cent) and Western region (10 per cent).

Orissa-based OCL India, taking a cue from the robust demand of cement, is also planning to double its cement production capacity, and has chalked out a Rs 700 crore investment programme to increase the capacity of the existing plant to 3.8 mt from the present 1.8 mt.

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