Birla Corporation Ltd plans to acquire cement plants overseas, a top official said on Tuesday.
“We are examining some projects overseas in the emerging countries. With our cash flow comfortable, we are looking to take over some cement companies overseas,” Harsh. V. Lodha, chairman, told reporters on the sidelines of its annual general meeting.
However, he refused to divulge further details. “Initial study looks good, but it’s too premature to disclose anything further.”
The Kolkata-based firm, which makes cement, jute, auto trims and vinolium has earmarked 23.5 billion rupees for expanding cement capacity to 11.5 million tonnes from 5.8 million tonnes.
“We would invest 23.5 billion rupees for expanding the cement business over the next 4 years, which includes both increasing capacities at our existing plants and setting up new plants,” he added.
It will invest 5.7 billion rupees in Chanderia at Rajasthan for setting up a 1.2-million-tonne cement plant and another 12 billion rupees in a 3-million-tonne cement plant in Satna at Madhya Pradesh, while a 1-million-tonne cement plant will come up in Assam at an investment of 5 billion rupees.
“For the Assam plant, we will sign the memorandum of understanding with the state government soon,” Lodha said.
On fund raising options, Lodha said the company would be onservative in raising debt as it has cash reserve of around 9 billion rupees.
“Presently our cash reserve is comfortable. However, having said that, we will be raising 6.5 billion rupees as debt for our projects in Rajasthan and Madhya Pradesh,” he said, adding the company is in talks with various banks and the funds would be tied up by FY10.
The company, which reported a net profit of 1.52 billion rupees for the July-Sept quarter, expects to maintain an operating margin of 40.26 percent during FY10, Lodha said.