Kesoram Industries sees FY11 capex at Rs1,125 crore

Kesoram Industries sees FY11 capex at Rs1,125 crore

Kolkata: Kesoram Industries Ltd plans to invest Rs1,125 crore on capex in FY11, its chairman said on Thursday.

“Considering the expected growth in demand for cement, we have decided to further expand the clinker production capacity by 1.7 million tonnes per annum," B.K. Birla, chairman, Kesoram Industries Ltd, told shareholders during the companys’ annual general meeting.

The firm also plans to set up a new 2.5-million-tonne per annum cement grinding plant in Maharashtra, he added.

The commercial production of cement from the plant is expected to commence by September 2012, and the total cement capacity post expansion would be around 9.75 million tonnes per annum, Birla said.

Commenting about the ongoing Rs800 crore expansion of tyre capacities, which the company undertook last year, he said the civil construction is in full swing and commercial production is expected to commence by March 2011.

The tyre segment constitutes more than 50% of the Kolkata-based company’s revenue and its capacity is expected to touch 1,500 million tonnes a day post expansion.

The company expects revenue growth of 30-40% in 2010-11, said Deepak Tandon, wholetime director, Kesoram Industries.

“We have crossed Rs5,000 crore mark during FY10, so taking into account the current demand situation, total revenue during FY11 should be around Rs6,500-7,000 crore," he said.

Amalgamation of group compnaies

B.K. Birla, the founder of B K Birla Group, is planning to amalgamate two of its group companies - Mangalam Cements and Mangalam Timber.

“Since one of the companies is not performing, and the other is doing very well, so it makes much sense to amalgamate both of them," Birla said.

“I tried to pursue issue with the board, but could not due to some objections."

Consequently, Birla who holds close to 30% of stake in both these companies, is planning to increase his stake to more than 40% to force the issue, he said.

“Once my holding increases to 40%, then there will be no objection and we can go aahead with the process (of amalgamation)," he added.