JSW Cement to hike capacity fourfold, foray into RMC

JSW Cement Ltd, a part of the $11-billion JSW Group, is all set to enter the ready mix concrete (RMC) business and further boost its capacity by starting clinkerising units in three more cities with total investments of around Rs 5,000 crore over a period of five years.

In an interaction with Deccan Herald, JSW Cement Ltd Director and CEO Anil Kumar Pillai said that the investments would help the company increase production capacity to 25 million tonnes per annum (mtpa) from the current 6 mtpa.

“As part of the plan, we are investing Rs 3,000 crore at Chittapur in Gulbarga and Rs 600 crore to set up a grinding facility near Nandyal. The additional investment of Rs 900 crore will be for starting clinkerisation units and Rs 250 crore for RMC units,” he said.

“We think it will be the right moment to enter the business as it will bring in more revenues to our existing business model. We have started a RMC unit at Kurnool which validate the prospects for this business as we do not want to commit to a segment where existing players have set benchmarks,” he said.

Besides the space constraints in cities and shorter deadlines for builders, the construction industry is facing massive labour shortages and increasingly looking at mechanisation. This, coupled with the fast growth of the infrastructure sector and largescale construction, is pushing builders towards the RMC segment.

According to Pillai, JSW Cement will become only a Portland slag cement manufacturing company by the end of next year. “We want to build our brand with environment-friendly products. Slag cement can play a major role here, and our company will take a lead in this segment,” he said.

About the future growth trajectory for the company, he said the goal is to be known as an engineering company instead of a commodity product company. “As part of this initiative, we are actively looking into entering the precast concrete block segment and other related products in due course of time,” he said. Pillai said the company is ready to push for inorganic growth if it finds appropriate target companies.

Talking on the new government’s initiatives, he said cement companies are seeing more momentum for the economy. “The new government is placing more thrust on infrastructure projects and we find opportunities in it. Actually, our capacity utilisation last year was below optimum levels as demand was not there,” he said.