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New Delhi, May 10 (PTI) Cement maker OCL India, which clocked more than two-fold jump in net profit at Rs 55 crore in the January-March quarter, today said it plans to invest Rs 300 crore to expand its production capacity. The company''s production capacity would increase by one million tonnes to 4.8 million tonnes per annum (mtpa) after the said investment. "We plan to increase our grinding capacity by one million tonnes. This can take place in an existing grinding unit or at a new plant," OCL India President M H Dalmia told PTI here. The proposed expansion, which will take OCL''s high-grade cement making capacity to 4.8 mtpa, would cost around Rs 300 crore, he said, adding OCL would fund the project from a mix of internal accruals and debt. Dalmia, however, declined to give any time-frame for the proposed expansion plan, saying this would all depend upon the market conditions, which is currently tilted towards over supply. "There is an over supply situation in the country. More supply will come and thus there will be pressure on margins for the cement makers. Our decision thus will be based upon the market situation. We may take a decision in the next two months or in the next six months," Dalmia said. OCL India has two plants, both in Orissa. The company sold 3.3 MT cement in 2009-10 against 2.6 MT in 2008-09. Dalmia said the production of the company may go up to 3.5 MT in the current fiscal as the demand for cement is high in the eastern region of the country. Asked whether OCL has plans for acquisitions, Dalmia replied in the affirmative, but added that nothing, as of now, is on the company''s radar. "We have Rs 400 crore cash reserves. We may use that for acquisition, but nothing is on our radar now," he said. Dalmia holds 23 per cent stake in OCL India, while Dalmia Cement (Bharat), a prominent player in the South with 9 mtpa capacity, has 45.4 per cent holding in the firm. Asked if OCL India could be merged with Dalmia Cement (Bharat), Damlia said, "There is no immediate plan, but this can happen". OCL (India) recorded a 138 per cent jump in net profit for the quarter ended March 31, 2010, at Rs 55 crore on high volume and better price. The company had recorded Rs 23 crore net profit in the same quarter last year. Net sales rose by 19 per cent during the quarter to Rs 418 crore compared to the corresponding quarter last fiscal. Net sales during 2009-10 stood at Rs 1,374 crore compared to Rs 1,119 crore in 2008-09. Net profit during the year was Rs 164 crore against Rs 116 crore in FY''09.
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