Sagar Cements Ltd will lay a 7-kms private railway line to connect the company’s plant near Matampally in Nalgonda district of Andhra Pradesh, with the main railway line. The company will invest Rs 120 crore in this, of which Rs 98 crore is to come from debt and the remaining from internal accruals.
The move will help the company to improve its market reach and cut freight costs. Sagar Cements’ dispatches were 15.50 lakh tonnes in March 2013; of that, 39,449 tonnes were transported by rail. It is expected that the dispatches by rail are expected to go up 20 per cent after the private line is laid.
The company plans to get the line ready by FY2015. Sreekanth Reddy, Executive Director, Sagar Cements, said that Rs 20 crore has already been invested in the project and that the completion of this line would lead to better efficiencies and savings in costs.