International BusinessShree Cement forays power sector; to invest Rs 1,200cr
Kolkata-based Shree Cement today announced its foray into commercial power business and will invest Rs 1,200 crore in the next two years to set up a 300 Mega watt thermal power plant in Rajasthan.
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"We have decided to set up a merchant power plant of 300 Mw capacity at Beawar in Rajasthan. The company has earmarked an investment of Rs 1,200 crore for this purpose," Shree Cement managing director H M Bangur said.
Bangur said the company would sell the power generated from the plant in the open market and would not utilise it for captive purpose.
The company would soon award the contract to develop the power plant and is currently having the final round of discussion with four firms — one each from the US and China and two domestic entities, he added.
On the source of funding the project, Bangur said, "It will be a mix of internal accruals and debt. While Rs 800 crore will be utilised from our own resources, about Rs 400 crore will raised from lenders."
The proposed unit, which is expected to start operation within the next two years, would be a thermal power plant and coal for the purpose would be fully imported, Bangur said.
In April, Shree Cement had announced an investment of Rs 1,200 crore in the current fiscal on expansion, which includes setting up two greenfield cement plants and installing four captive power plants.
Post-expansion, the company"s installed cement capacity would reach to 11.5 million tonnes from nine million tonnes, while the captive power capacity would increase to 265 Mw from the existing 120 Mw.
Shree Cement, which has three cement plants in Rajasthan, is establishing two new plants in Rajasthan and Uttarakhand with a capacity of one million tonnes per annum each. The captive power plants would be installed at cement units in Rajasthan.
The company would sell the surplus power from its captive plant. "After the expansion, we plan to sell 150 Mw by the end of FY 10, while the rest will be for captive use," he said.