Hyderabad: NCL Industries Ltd (NCL), a Hyderabad-based mid-sized cement manufacturer, has decided to nearly triple itsproduction capacity to cater to growing demand from the construction and infrastructure industry in the country.
The company has its manufacturing units at two locations in Andhra Pradesh, at Mattapally in Nalgonda district and Kondapally in Krishna district.
NCL, which markets its produce under the Nagarjuna Cement brand, currently has a clinker capacity of 1,800 tonnes per day (tpd) at its Mattapally facility and two grinding units of 1,000 tpd each at Mattapally and Kondapally.
“The civil work for expansion, involving an investment of Rs300 crore, would begin soon and the expansion should complete by November 2008,” said NCL managing director K. Ravi. The company has placed equipment orders with Indian and Chinese suppliers.
NCL plans to add 3,000 tpd of new clinker capacity at Mattapally and grinding capacity of 2,000 tpd each at Mattapally and Kondapally, its senior vice-president of finance N. Prasad said. The annual cement capacity of NCL will reach 2 million tonnes (mt) on completion of expansion from 6,30,000 tonnes now.
India is the second largest manufacturer of cement in the world after China and has an installed capacity of 160mt per annum which translates into a market of Rs55,000 crore. Demand in the Indian cement industry is projected to grow at 8% annually in the next five years. And companies have embarked on projects that will add an estimated 70-75mt capacity by March 2009.
NCL plans to raise Rs230 crore through a combination of foreign currency convertible bonds (FCCBs), external commercial borrowings (ECBs) and a rupee term loan. The balance, Rs70 crore, will come from promoters’ equity contribution of Rs15 crore and around Rs55 crore of internal accruals. UTI Bank Ltd, which is arranging funds for the expansion, is finalizing the exact break-up of the loans.