Sanghi to raise Rs 660 cr to expand cement biz

MUMBAI: Gujarat-based Sanghi Industries, part of the Rs 4,500-crore Sanghi Group, plans to raise about Rs 660 crore in debt for part-financing an expansion programme that will almost triple its current cement-making capacity.

Sanghi, which currently operates a 2.6 million tonne cement plant in Kutch, Gujarat, has estimated the expansion programme to cost Rs 1,100 crore. Of this, about Rs 440 crore would come through equity, director Alok Sanghi told ET.

“We are revisiting our earlier plans that had been suspended due to the recession. Seeing recovery in the economy, we have decided to go ahead with the expansion,” said Mr Sanghi. The global slowdown following the liquidity crisis had prompted many companies to put their expansion plans on hold as banks weren’t willing to lend to projects.
The Indian cement market, considered to be the world’s second fastest growing after China, is seeing a demand growth of 12-13% annually as the government rushes to build roads and ports to boost infrastructure. Also, a strong drive to build houses is leading to a sharp rise in cement consumption, prompting cement companies to expand capacities to meet the growing demand.

Sanghi Industries is drawing up plans to hike its cement capacity to 8 million tonnes. Shares of Sanghi Industries were down 0.5% at Rs 28.75 on the BSE on Thursday. The Rs 867-crore company will add 5.4 million tonnes capacity in Kutch. The company sells its cement products mainly in Kutch and south Gujarat and is planning to enter newer markets such as Karnataka, Kerala and Maharashtra.