International BusinessJ K Lakshmi to invest Rs 1,600 cr on expansion
J K Lakshmi Cement will invest about Rs 1,600 crore over the next three years on expansion, which includes setting up of a 2.7 million tonnes greenfield manufacturing plant in Chhattisgarh.
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"We are expanding our cement capacity. By 2012, our capacity will reach to 8 million tonnes per annum," J K Lakshmi Cement Managing Director Vinita Singhania told PTI.
Singhania said the 2.7 million tonnes greenfield cement plant in Durg (Chhattisgarh) will be set up at an investment of Rs 1,100-1,200 crore.
At present, J K Lakshmi has a cement plant in Sirohi (Rajasthan) and a grinding unit near Ahmedabad with a total annual capacity of 4.7 million tonnes. The company sells its cement in northern and western region of the country.
Elaborating more on expansion, company"s Whole-time Director Shailendra Chouksey said the company is scouting for 30 acres of land in Haryana and Uttar Pradesh to set up a 5.5 lakh tonnes cement grinding unit.
"The investment to set up the grinding unit will be Rs 80 crore," he said, adding that the unit is expected to become operation by March 2011 taking the company"s annual capacity to 5.2 million tonnes.
Chouksey said the Durg cement plant will be operational by October 2012. "We have bought about 50 per cent of the total 600 acre land required for setting up this plant."
Besides cement, J K Lakshmi is putting in Rs 200 crore to expand its captive power generation capacity.
"We are setting up a 12 Mw waste heat recovery plant at a cost of Rs 125 crore at our Sirohi plant," Chouksey said, adding that another 18 Mw thermal power plant would come up at the same site with an investment of Rs 75 crore.
Post-expansion, the company"s captive power generation capacity will reach to 66 Mw from the current 36 Mw. Chouksey said the company would sell the surplus power.
J K Lakshmi is also expanding capacity of its ready mix concrete (RMC) business by adding 10 new plants. It currently has 11 plants. "RMC plants will require about Rs 100 crore," he said.
On the source of funding for the planned investments, Chouksey said it would be through internal accruals and debts.
JK Lakshmi Cement"s net profit jumped by over 75 per cent in the second quarter ended September 30 at Rs 47.17 crore. It had posted a net profit of Rs 26.88 crore in the year-ago period.
Total income of the company rose to Rs 345.35 crore from Rs 293.75 crore in the review period.