During the year, Priyadarshini Cement has acquired a 600 tpd cement plant from Nagarjuna Constrution Company Ltd, after which the overall production capacity of the company has increased from 6 lakh tonnes to 14 lakh tonnes per year.

The acquisition will make the company a major player in the southern markets, said an official.

The acquisition has costthe company Rs 30.76 crore through cash payments and transfer of the existing debt of Rs 76.28 crore on the plant. It was funded entirely from internal accruals and loans from financial institutionms without increasing the equity, said sources.

In the post-expansion senario, Priyadarshini Cement proposes to enter new geographic markets and to succeed in a competetive industry which allows customers to choose their choice of cement.

"This will make the company one of the large players in the market and will give it an advantage that comes with higher economies of scale coupled with reduction in the cost of power and freight."

The Nalgonda plant, having an installed capacity of 6 lakh tonnes per annum, acheived a capacity utilisation of 128 per cent during the year under review. Further, Priyadarshini Cement proposes to expand the capacity of the plant to 1200 tpd by June 1999 and 1500 tpd by September 1999. The newly acquired plant at Racherla in Kurnool district has about 1250 acres of quality limestone mining reservers, which is enough for future expansion. It commenced operations last July. The plant will supply the cement to the customers in Kurnool, Hyderabad, Bangalore, and Chennai.