DBEL to invest Rs2,500 cr to set up two cement plants

DBEL to invest Rs2,500 cr to set up two cement plants

New Delhi: Dalmia Bharat Enterprises (DBEL) on Friday said it will invest 2,500 crore to set up two plants in Meghalaya and Karnataka of a cumulative capacity of five million tonnes per annum (mtpa).

“We will invest Rs2,500 crore in the two plants coming up in Karnataka and Meghalaya. The total capacity of the two plants will be 5 mtpa - both having 2.5 mtpa each," DBEL managing director Puneet Dalmia told PTI.

Dalmia said the two projects would be financed at a debt-equity ratio of 70:30. DBEL has already tied up with the financial institutions to finance the debt part. The equity component would be funded through internal accruals (Rs250 crore) and the money it had received from the KKR deal.

DBEL had earlier this year entered into an agreement with US-based private equity firm Kohlberg Kravis Roberts (KKR) to raise Rs750 crore by diluting stake in subsidiary Avnija.

Around 2,000 acres of land for the two projects have already been acquired and all the necessary environment and forest clearances are there in place to flag off the projects.

“We have all the clearances and work on the projects have already been commenced," he said, adding that both the projects in Mehgalaya and the Karntaka would start production within the next 24-30 months.

DBEL has three cement manufacturing plants - two in Tamil Nadu and one in Andhra Pradesh - with a total capacity of 9 mtpa. It also holds 45.4% stake in OCL India, a major cement player in the Eastern region of 5.3-mtpa installed capacity.

Dalmia said that the prospect of demand growth for the Indian cement industry led DBEL to make further investment in the sector.

“We continue to see some sluggishness in demand. But, we are confident of the demand for cement in India. It will grow at a very robust space for the next 20 years at least," he said.