The Hindu Business Line : Dalmia Cements to set up greenfield plant in AP

In a bid to expand its presence in south India, Dalmia Cements (Bharat) is planning to set up a four-million-tonne-per-annum (mtpa) capacity greenfield cement plant in Andhra Pradesh. The company will be investing roughly Rs 1,450 crore for setting up the plant.

Dalmia Cements currently operates a 3.5-mtpa plant in Tamil Nadu. The proposed greenfield facility would take the total cement capacity controlled by the company to about 12 million tonnes.

The company will largely fund the expansion by raising external money.

Top-end company

Earlier this year private equity fund Actis had picked up an 11 per cent stake in Dalmia Cement for a consideration of around Rs 115 crore. According to Mr Donald Peck, Managing Partner of Actis, the new plant will take Dalmia Cements into the league of the top-end cement companies in India.

Dalmia Cements is also working out a strategy to establish greater shareholder linkage and a strategic alliance with OCL India Ltd. This process would include the promoters of Dalmia Cements to sell their existing holding in OCL (estimated at about 20 per cent) to Dalmia Cements.

Further, Dalmia Cements would also be putting in new money into OCL, which is also on an expansion mode. Following the completion of this process, expected by February 2007, Dalmia Cements would have a substantial shareholding in OCL.

Earlier in July this year, Dalmia Cements had received shareholders approval to raise Rs 700 crore through the issue of securities in domestic or international markets.

The shareholders approved the issue of preference shares, debentures, depository receipts, warrants or other securities convertible into equity shares to domestic or foreign investors.