The B K Birla Group company Kesoram Industries Ltd, on the back of healthy cash flow, on Friday said that it is planning to ramp up the installed cement production capacity to 15 million tonnes from 11 million tonnes now.
Kesoram, which has now become a pure cement company after it demerged the tyres and rayon business, was on track to post a profit in the current fiscal, a senior company official said on the sidelines of its 103rd AGM chaired by Manjushree Khaitan, the chairperson of the company.
“We have decided to ramp up the cement capacity to 15 million tonnes in phases from 10-11 million tonnes now in the next 3-4 years. The total capex will be between Rs 350 and Rs 500 crore,” Kesoram’s whole-time director & CEO P Radhakrishnan said.
He said that the company’s financials will get better in the coming quarters with reduction of debt and refinancing with low-cost funds.
“We will turn profitable at a net level in the current fiscal,” Radhakrishnan said.
“We are continuously working toward reducing the interest burden to improve our finances. We will retire debt by Rs 500-600 crore this year and will refinance a part (Rs 300-400 cr) of the total outstanding debt with low-cost funds to bring down the interest outgo,” he said.
The company has an outstanding debt of Rs 1650 crore down from nearly Rs 2000 crore a year ago with high-cost Optionally Convertible Debentures (OCDs) and Non-Convertible Debentures (NCDs).
The B K Birla group company said it is also moving toward greater value-added cement in the product mix that will improve its EBITA by another Rs 150 crore in the next two years to about Rs 950 crore annually.
“We are continuously increasing blended cement in the portfolio. We will ramp up this to 80 per cent in two years from 50 per cent now,” the official said.
Kesoram was initially looking at adding one million tonne capacity by de-bottlenecking and later the company will add a kiln to the existing facility to reduce capex requirement.
Scouting all options, the company will soon begin accepting fixed deposits and the window will help raise closer to Rs 200 crore.
