JK Lakshmi cement plans to expand its presence to cope with infra industry needs

JK Lakshmi Cement is considering plans to set up a new plant in Gujarat with an investment of Rs 1,000 crore over the next 3-4 years to meet rising cement demand from the infrastructure sector, a senior company executive said.

The proposed two million tonne unit will boost its existing operations, which includes a cement plant in Sirohi (Rajasthan), besides a grinding unit near Ahmedabad, with total annual cement making capacity of 4.7 million tonne. The company is also in the process of setting up a second 0.6-million tonne cement grinding unit in Haryana. In addition, JK Lakshmi Cement had previously announced plans to set up a 2.7-million tonne cement unit in Chhattisgarh by October 2012, which would take its annual cement-producing capacity to 8 million tonne.

Shailendra Chouksey, whole-time director of JK Lakshmi Cement, said the expansion has been planned to meet the rising domestic demand from infrastructure-related investments. “The Gujarat project is still at a nascent stage and we are awaiting mining lease for limestone in the region. We have, however, expressed the intent of setting up a plant with the state government,” Mr Chouksey said. Limestone is a key input for cement production. He added that the proposed unit in Gujarat will be funded largely through internal accruals, besides some debt.

Cement demand in India has revived after a sluggish quarter ended December 2009, backed by accelerating construction activity. The industry sold 18.19 million tonne cement in January, a growth of 12.77% over the year-ago period. India’s current cement manufacturing capacity is around 240 million tonne annually and is likely to go up to 276 million tonne by the end of this fiscal.

Delhi-based JK Lakshmi Cement, which sells cement under the same brand name, operates primarily in North and West regions and is a dominant player in states of Rajasthan and Gujarat.