By the first half of 2015, Shiva Cement expects to complete its capacity expansion plan at its existing facility in Rourkela, Odisha. The company secured all approvals for the proposed Rs 270 crore expansion plan, which aims to raise its production capacity to 1 million tonne a year (mn tpa) from the current 0.132 mn tpa capacity. In the second phase, the company plans to increase the capacity further to 2 mn tpa.
The company has already tied up a term loan with a consortium of banks while the promoters have invested Rs 30 crore. They plan to sell all output through ACC, which holds a 12.65 per cent stake in Shiva Cement. Meanwhile, the company expects a revival in cement demand by the second half of this fiscal.
RP Gupta, Chairman and Managing Director of the firm opined that people postpone their plans for building new homes but do not drop it completely. A downturn in demand is always followed by a sharp revival, he said.
Owing to the high lending rates, the real estate sector, which accounts for about 55-60 per cent of total cement demand, is in bad shape. The deployment of funds by banks to the real estate sector has also dropped.
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