Ramco Cements announces capex and price rise

Ramco Cements has announced capex of INR12-13bn (US$154-167m) to expand its production capacity over the next two years. At its Kurnool plant, trial production of clinker is now underway and with this, clinker capacity has expanded to 13.65Mta. The cement grinding facility, 6MW waste heat recovery system (WHRS), and an 18MW thermal power plant (TPP) are due to be commissioned during 2QFY23, according to the Financial Express. An additional 1-1.5Mta of grinding capacity is also planned in Karnataka at a cost of around INR3bn, where the land acquisition process is already ongoing.
 
According to the company, cement demand was robust in April and May this year, mainly due to the low comparison base in 2021 when lockdowns were in place. However, infrastructure activity is improving with the industry expected to grow by around 10 per cent in FY23, with Ramco targeting volume growth of 15 per cent. The company’s net debt stood at INR38bn in FY22 and it plans to repay INR5bn in FY23. Assuming no further major capex, the company hopes to be debt free by FY26. 
 
Due to rising fuel prices, however, the company has also announced a price increase of INR20-25/bag in the south, effective in June 2022, according to The Hindu.