Chennai-based cement manufacturer India Cements on Friday announced its decision to monetise its land assets in a bid to repay debt and for the purpose of capital expenditure. The company has an outstanding debt of Rs 3,000 crore in its books as of March 31, 2022. It owns around 26,000 acres and has set up an internal group to oversee the monetisation process. With an aim to upgrade some of its older plants, a certain amount will be garnered through land sales.
N Srinivasan, vice-chairman & MD, India Cements, told a select group of media persons that the sale of land will be done at the right price only. “I have 26,000 acres of land. I am not a distressed seller. I have appointed a team of experts to decide. The amount will be used to repay the debts and make some improvements in its plants,” he said.
Last fiscal year, the company repaid Rs 551 crore and this year it planned to repay Rs 500 crore. There would be no change in its planned capex, he said, adding, “I may be selling the land to the extent of my requirement only. We have lands in city, out of the city and in rural areas.”
India Cements will resort to price increases in three stages next month in a bid to stay afloat. “My OPC/PPC mix also changed, affecting the cost of production. My cost went up. To compensate the cost increase, I have decided to increase the price per bag on June 1, June 15 and July 1 by Rs 20, Rs 15 and Rs 20, respectively. Whether others will support me or increase the price, it is remained to be seen,” he said. According to Srinivasan, the average price of cement in the South ranged from Rs 320 to Rs 400 a bag.
He said most cement companies in the South were operating at 40- 50% capacity. “If the cement does not go from here, the North will face a huge shortage in a few years,” he said. Appreciating the Union finance minister for being supportive of their demand, Srinivasan said he hoped something positive will come soon.