Deccan Cements on major expansion spree

Hyderabad: AP based leading cement manufacturer, Deccan Cements, has decided to take up an expansion programme. The company hopes to increase its manufacturing capacity from the current 6.5 lakh tonnes a year to two million tonnes at a cost of Rs. 4,320-million.

A part of the investment, around Rs 78 crore, is also being utilised for setting up an 18-MW thermal power plant.

“The brownfield expansion of adding one million tonnes cement plant started in July last year and is nearing completion. The plant in Nalgonda district will be commissioned in August and commercial production is expected to begin from September this year,” Mr M.B. Raju, Chairman, Deccan Cements Ltd, said while addressing a press conference.

Out of the total investment, Rs 150 crore has been raised from internal accruals and equity, while rest of the Rs 282 crore is through a term loan from various commercial banks. Mr Raju said that the company has already spent about Rs 265 crore.

“The 18-MW power plant, once commissioned, will insulate the company from grid fluctuations and also will help bring about significant operational economies. Also, with the existing hydel power (4.5 MW) and wind power (5 MW), the aggregate generating capacity available with the company would be 27.5 MW,” he added.

The company, to reinforce its infrastructure in cement dispatches as well as inward material movement like coal, slag and gypsum, is also putting up a railway siding line.

According to Mr Raju, the company will be laying special emphasis on blended cements, special cements and OPC.

DCL’s net profit for the fourth quarter ended March 31, 2008 increased 37.13 per cent to Rs 10.93 crore (Rs 7.97 crore). The net sales for the quarter were up 14.26 per cent to Rs 53.27 crore (Rs 46.62 crore).

For the financial year ended March 31, 2008, the net profit of the company increased 68.75 per cent to Rs 47.96 crore (Rs 28.42 crore). The net sales for the period rose 21.85 per cent to Rs 209.21 crore (Rs 171.69 crore). The EPS for the 2007-08 fiscal was Rs 68.49 (Rs 40.59). The company’s scrip was up 0.04 per cent on the BSE to close at Rs 230.15 on Friday.