Shree Cement is aiming to double its cement manufacturing capacity in next six years. In other words, the Company is planning to grow its capacity at 12% CAGR over next 6 years. The company also wants to reduce its over dependence on Northern region and wants to become a pan India player.
The company presently has 44.4 MTPA capacity which it wants to increase to 80 MTPA in six years. The capacity will be increased in two phases of three years each. In first phase, the company is planning to increase capacity by 16 million tons in North and East and in second phase, by 24 million tons in North, East and South. The 3 million ton capacity expansion each at Odisha and Pune is expected to commence by March 2020 and June 2020.
However, the company will not be borrowing any funds to finance the expansion plans and instead it will depend upon internal accruals and qualified institutional placements (QIP). The company has chalked out expansion plans of Rs 11,000 crore in next three years. Out of this, Rs 9,000 crore will be spent on 16 million ton expansion along with power capacity expansion and the balance on working capital and various maintenance expenses. Out of the total requirement of Rs 11,000 crore, Rs 8,000 crore will be funded through internal accruals and the balance through QIP.
Till 2012-13, the company was concentrated only on North Indian market from where its entire sales used to come. However, its gradual expansion in Eastern and Southern market, its revenue from Northern region has now come down to 58%.