The acquisition has cost PCL Rs 30.76 crore, as payment to NCC and a transfer of the existing debt of Rs 76.28 crore on the plant. PCL plans to close this transaction with internal accruals and borrowed funds from financial institution.

However, there will be no increase in the exiting equity of Priyadarshini Cement, Reddy said.

The expansion will enable the company to enter into new geographic markets and to succeed in a competitive industry which allows customers to choose their choice of cement, Reddy said.

The company, presently, has a plant at Nalgonda which has beenoperating at over 800,000 tonnes per year though the installed capacity of the plant is only 600,000 tonnes per year.

Priyadarshini Cement plans to expand the capacity of the plant to 1200 tpd by June 1999 and 1500 tpd by September 1999.

The state-of-the-art cement plant at Racherla in Kurnool district has commenced operations last July 1998.

The plant has about 1,250 acres of quality lime stone mining reserves enough for future expansion activity, he added.

PCL has a stong brand loyalty in the states of Andhra Pradesh, Karnataka, and Tamilnadu.

The newly acquired plant will cater to the cement requirements of the customers in Kurnool, Hyderabad, Bangalore and Chennai.

"This acquisition is a natural fit, providing the split location advantage and thereby logistical benefit that is needed to succeed as our industry continues to evolve", Reddy said.

At present, Priyadarshini Cement is setting up two ready-mix-concrete plants in Hyderabad, which will commence operations in third quarter of 1999.