The Rs 2,500-crore joint venture (JV) plant of Hyderabad-based Sagar Cements and Vicat Group of France is likely to commence operations next year. The work is progressing on schedule and it would start production of Phase I by June 2012, said S Sreekanth Reddy, Executive Director, Sagar Cements. Phase I of the plant, coming up at Chatrasal in Gulbarga district of Karnataka, would involve an investment of Rs 1,650 crore. The financial closure, in the form of Rs 1,000-crore debt and Rs 650-crore equity has already been completed. The cement production capacity of the first phase will be 2.5 million tonne. The total capacity including second phase would be at 5.5 million tonne by 2014, Reddy added.