Economic Times reported that Heidelberg cement's capacity expansion plans are to augur well for the company as it results in doubling up of its capacity and reduction in the costs due to operating efficiencies in the transportation and fuel front.

The company's investment of INR 65,000 crore will increase its grinding capacity from the current 3.1 million tonnes per annum to 6 million tonnes per annum. The clinker size also increases from the current size of 1.2 million tonnes per annum to 3.1 million tonnes per annum. The unit is scheduled to be commissioned by Nov'12 and is majorly a brownfield expansion.

The expansion comes in high growth areas of Uttar Pradesh and Madhya Pradesh, both in central India. Realisation in central India over the last couple of years has been in the range of INR 265 to INR 290 per bag and is amongst the highest. The facilities in these areas have been operating at high utilization rates of 90 to 95% which is highest in India.

The company will also invest around INR 11,000 crore in setting up a conveyor belt to transport the limestone from mines to the grinding unit. The conveyor belt will substitute trucks and will give a cost advantage of INR 100 per tonne.

Source - Economic Times

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