₹240-cr Tutucorin plant to go on stream in January
My Home Industries, one of the largest conglomerates based in Telangana, with interests in cement and real estate, is set to increase its cement production capacity to 10 million tonnes.
Its 1.5-million tonne plant in Tuticorin, Tamil Nadu, is expected to be commissioned in January 2017.
My Home, with its ‘Maha Cement’ brand, became a major player in the sector with with the acquisition of the 3.2-million tonne cement plant of Sree Jayajyothi in Kurnool, Andhra Pradesh, from Shriram EPC in 2013 for around ₹1,400 crore.
The plant was facing a ₹680-crore loss and heading to BIFR. My Home infused around ₹700 crore in equity. The 100 per cent subsidiary has since been turned around, and it logged a ₹124-crore profit last fiscal.
My Home is now looking to break into the big league. “We want to go in for acquisitions in north, central and western India to further increase the capacities,” said J Rameswar Rao, founder Chairman of the ₹5,000-crore, zero-debt, cash surplus group.
The port-based Tuticorin plant will see an investment of ₹240 crore. Once it starts production, the company’s access to both the southern and eastern markets will considerably increase.
Privately-held My Home currently has two integrated cement plants — at Mellacheruvu in Nalgonda district of Telangana and Yanakandla village in Kurnool district. In addition, it operates a grinding unit at Mulakalapalli village in Visakhapatnam district of Andhra Pradesh.
Ready mix concrete
The combined capacity of the three plants is around 8.8 million tonnes per annum. The company also operates two ready mix concrete units.
My Home has a 50:50 joint venture with Ireland-based global construction materials major CRH, under which the cement business is being rapidly expanded in the country. In 2008, CRH had picked up a stake in the Hyderabad-based cement company for ₹1,837 crore to enter the Indian construction market.
“As far as the cement sector is concerned, we (My Home and CRH) grew together and will grow together,” said Rao.
On the market trends, he said the cement sector has seen volatile times, with significant additional capacity coming in.
“Growth is likely in Telangna and Andhra Pradesh once all government initiatives like housing and irrigation projects fully take off,” he said, adding that the private sector demand could go up 5-7 per cent going forward.
“The rollout of GST might give some relief to the cement sector,” he said.
At present the tax regime is choking the sector since VAT is 5 per cent on steel but 14 per cent on cement.