K.T. Jagannathan

CHENNAI: Even as cement companies are having a field day in the wake of a strong demand on the back of a buoyant economy, Dalmia Cement (Bharat) Ltd. has decided to on embark on a slew of Greenfield initiatives to expand its capacity to 15 million tonnes by 2010.

The move on the expansion front will see Dalmia spread its presence across different geographical locations. It is also designed to help the company gain market share.

As part of the exercise, Dalmia will set up a two million-tonne capacity plant at Ariyalur in Tamil Nadu. It is also on the look out for a suitable location to set up a 2 to 2.5 lakh-tonne capacity unit in Karnataka.

In an interaction with The Hindu, T. Venkatesan, Chief Executive Officer (Cement) of Dalmia Cement, said Orissa Cement, a subsidiary of the company, would also be expanding by doubling its capacity from the current 2.5 million tonnes. Dalmia, he said, had already commenced work on a two million-tonne Greenfield project in Guddappah in Andhra Pradesh. The Andra Pradesh project would go on stream by 2008. He expected the Ariyalur project to go on stream in early 2009.

Fielding a range of questions, Mr. Venkatesan said production at the Dalmiapuram plant of the company could be scaled up to four million tonnes from the existing 3.5 million tonnes by next year with little modification and not much investment. Each unit would have a captive power of 25 MW, he added.

Mr. Venkatesan said Dalmia was giving a major thrust on improving the operational efficiency of the equipment. ``We want to sweat our assets,'' he said, pointing to Dalmia's efforts at beefing up production within the existing framework.

The supply side constraint, he said, would ensure that the cement companies had a field day in the next couple of years. In this context, he said that the prices of steel, aluminium, copper and the like had risen much faster than that of cement. Pointing to the capacity expansion of the order of 121 million tonnes currently under way in the country, he said prices could soften beyond 2009 for a while. In any case, Mr. Venkatesan said, ``we see a good period between 2011 and 2018.''