Malabar Cements plans Rs450-cr investment, eyes 50 pc market

Kochi: Malabar Cements Ltd (MCL), a fully owned Government of Kerala undertaking, is seriously working on an ambitious plan to modernize its plants and substantially increase capacity at an investment estimated to be in the region of Rs270-Rs300 crore.

Another Rs185 crore may be invested in Tavancore Cements (which makes only white cement), another government-owned plant, to produce portland cement thus bolster the cement producing capacity further.

Talking to businessbenchmark.news (BBN) recently at its office in Kochi, VBR Nair, the managing director of MCL, said he would like to see the company’s share in the state’s cement market goes up from a sub-10 per cent to as high as 35 to 50 per cent once the expansion plans are through,

There are certainly several walls of worries to be climbed before the company could reach this ambitious market share. Nair, who took the helm of the company more than a year back, said the company had already presented the detailed project report (DPR) for the modernization and expansion of MCL to the government.

While currently MCL’s Walayar plant has a capacity to produce 6.6 lakh tonne and the Chertala unit, another 2.2 lakh tonne annually, the new plan envisages the production of its Walayar unit to reach one million leaving the Chertala unit to maintain the status quo on production for the time being.

MCL had earlier embarked on a plan to have a mixing and bagging unit within Cochin Port Trust (CPT) premises and the company already has a leased land in CPT acquired as part of this plan.

However, MCL, which has decided to fire on all cylinders in order to establish its name in the state’s fast growing cement market, has plans to produce another 10 lakh tonne from the CPT facility, thus taking the total production capacity to 2.2 million tonne within the next 15 to 18 months’ time.

“If things go well, we can utilize the Tavancore Cements facility, which makes only white cement currently, to make another one million to add to the group’s capacity,” Nair exuded hope.

In order to fund these plans, Nair has set his eyes on the government to facilitate loan either from Kerala Infrastructure and Investment Fund Board (KIIFB), a Special Purpose Vehicle (SPV) established to mobilise and channel funds to various infrastructure and other projects, or from some other financial institutions of government’s choice.

MCL will also explore the possibility of drawing funds from its GST remittances with the advice of government. According to him, while the capacity expansion at Walayar unit may require about Rs120 crore, the CPT production plans may call for an investment of about Rs150 crore and another Rs185 crore to set up portland cement facility in Travancore Cements thus taking the total investment to the region of Rs450 crore or upwards and the cement capacity to 3.2 million.

Nair relies on the state government’s annual requirement of about 2.4 million tonne to boost his company’s sales target. “Even if we can cater to half of the government requirement, we will have enough quantity to sell. And with the modernization and expansion of our existing plants, we are confident that we will make a grand comeback soon,” he added.

 

2 Comments

  • P.balasubramaniam says:

    In this news , it is only discussed the future plans only. What are the crisis that facing MCL and the corruption cases of official s of MCL. Loss’s due to the wrong policy decisions taken by former MD & other top officials also not covered in this news. It also suggested to discuss on the vigilance cases against the md & top officials.

  • George says:

    How is Malabar Cements doing on the financial front? It appears to be making losses

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