Sanghi plans capacity expansion for Kutch plant

Hyderabad, Jan 26 | Updated: Jan 27 2005, 05:30am hrs
With full capacity utilisation, coupled with increasing demand from the overseas markets, Sanghi Industries Ltd, part of the Rs 1,500-crore Sanghi Group, has decided to go for a massive capacity expansion at its cement plant in Kutch, Gujarat with an investment of over Rs 1,000 crore in two phases.

The company, as a first step, has decided to expand its capacity from 2.6 million tonnes to 3.6 million tonnes in the next few months, and then increase it further to seven million tonnes in the next two years with an investment of over Rs 1,000 crore, said Ravi Sanghi, managing director of Sanghi Industries.

In an exclusive interview with FE at Sanghi Nagar near here, Mr Sanghi said: The demand for cement is very high and is growing substantially. We decided to go for debottlenecking by expanding our capacity in a massive way. Mr Sanghi, who is also a director in a number of Sanghi group companies, said: We decided to take up the expansion in phases and accordingly the company will expand to 3.6 million tonnes in the next six to eight months with an estimated investment of Rs 100 crore and will be further expanded to seven million tonnes in the next two to three years. Our plant is by far the single largest stream plant in the world, he said.

The company is holding talks with financial institutions and banks to fund the expansion plans. We have options like bringing in strategic investors, raising funds from FIs and banks and from internal accruals, Mr Sanghi said.

Ours is a premium brand over others and has been well received by the local market. We believe that Sanghi Cement will continue to get good market exposure apart from increased demand from export markets, he said.

Of the total capacity, Sanghi is exporting 50% to countries in Middle East (largest exporter), followed by Spain, the US and Bangladesh. We have been getting a large number of export enquiries. However, our capacity is not sufficient to meet their obligations and we hope the proposed expansion will enable us to export more, Mr Sanghi said further.

According to PV Reddy, vice-president (projects), Sanghi Industries, Despite being a late entrant, Sanghi could gain a huge market for its product due to its high-quality and other infrastructure facilities.

Set up with an investment of Rs 1,400 crore, Sanghi uses the latest technology from Fuller International of the US, which also is an equity partner in the company with 100% water and power back-up facilities within the plant, enabling continuous quality production, he said.