Dalmia to invest Rs 2,500 cr in 2 greenfield cement projects

Dec. 3, 2010 - Dalmia Bharat Enterprises plans to invest Rs 2,500 crore to set up two greenfield cement plants in Karnataka and Meghalaya.
Mr Puneet Dalmia, Managing Director, Dalmia Bharat Enterprises Ltd, said the mining and environmental clearances are in place, work on the projects has started, and the company hopes to commission the units in 24 months.
Dalmia Bharat is the new company handling the cement, power and refractories business of Dalmia Cement (Bharat) Ltd, which was recently restructured. Dalmia Cement, which included operations in sugar, has been renamed Dalmia Bharat Sugar and Industries Ltd.
Mr Dalmia said the two greenfield units with a capacity of about 2.5 million tonnes a year each, will add to the company's existing capacity of 14 million tonnes.
The funding would be through internal accruals and debt, about 70 per cent. The company has decided to go ahead with the expansion, despite the 'cautious' near term outlook for cement because of the inherent strength and positive long term outlook. Dalmia Bharat has "patient capital and deep pockets," he said.
Earlier this year, the company announced that a global alternative asset management company, Kohlberg Kravis Roberts & Co. L.P.,announced plans to invest Rs 750 crore in Avnija Properties, a subsidiary of Dalmia Bharat, which handles the cement business.
Mr Dalmia said with the demerger effective, Dalmia Bharat will be listed in a week's time.
The restructure is aimed at enabling a "focussed and transparent corporate structure."
According to a press note from Dalmia Bharat, following the restructure, the captive thermal power business is demerged into DCB Power Ventures Limited (DCBPVL), the refractory business carried out in the name and style of "Dalmia Refractories" and certain other businesses have been demerged into Dalmia Bharat.
Dalmia Bharat operates three cement units with a total capacity of nine million tonnes in Tamil Nadu, at Dalmiapuram (4 million tonnes) and Ariyalur (2.5 million tonnes), and in Kadapa, Andhra Pradesh (2.5 million tonnes). It also holds a 45 per cent stake in OCL, which brings under its control, about 5 million tonnes in the eastern region.