New Delhi: Aiming to augment its capacities, cement manufacturer JK Lakshmi is embarking on an expansion plan to set up five ready-mix concrete (RMC) plants, which could entail an investment of up to Rs1,000 crore by the end of this fiscal.
“By March 2009, we will set up 4-5 RMC plants in four different locations to add value to our RMC business. With the growing demand of cement in the realty space in the country, we see a good future for RMC plants,” Lakshmi Cement Managing Director Vinita Singhania told PTI.
She, however, declined to comment on the production capacities and the possible locations of the plant.
“We are targeting to set up 6-7 RMC plants per year as our existing facilities are undergoing optimum capacity utilisation,” Singhania added.
On the size of the investment, she said the cost of setting up one RMC plant is between Rs140 crore and Rs200 crore.
“The company will fund the cost of expansion through internal accruals. The construction work of two plants is on and the company would launch the other projects very soon,” she added.
In the last financial year, J K Lakshmi set up five RMC plants each with a capacity of 60 cubic mt per annum at Ahmedabad, Baroda, Jaipur, Mohali and Surat taking the total number of RMC units to 10.
Besides, the national capital-based cement manufacturer is also enhancing its captive power generation by adding new plants.
”With the rising cost pressure, we at JK Lakshmi Cement will undertake several cost cutting measures to ensure that the fund requirements for value addition can be met through internal accruals.
“The rising cost of power plants has also made it necessary to set up captive power plants for each of our cement units,” Singhania said without divulging any detail.
She said the company is expecting its operating cost to minimise after its 36 MW captive power plant at Sirohi (Rajasthan) gets commissioned later this year.
JK Lakshmi Cement has added a cement plant at Sirohi with a production capacity of five million tonnes.
In its recently held annual general meeting, the company said it was able to reduce power consumption to 79 KWH per tonne from 83 KWH per tonne of cement in the previous year, besides reducing coal consumption to 80 kg per tonne from 84 kg per tonne.
The company is also enhancing its clinkering capacity and installing a split location grinding unit at Kalol in Gujarat to take its current capacity to 4.75 million tonnes from 3.65 million tonnes.
Last month, the company had announced an investment of Rs1,200 crore to set up a greenfield project in Chhattisgarh with an annual capacity of 2.7 million tonnes, which is scheduled to commission by 2011.
“With the completion of the plant at Durg in Chhattisgarh, our capacity will go up to 7.5 million tonnes per annum,” Singhania said.