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Business News/ Companies / News/  JSW subsidiary Shiva Cement to invest 1500 crore in new Odisha unit
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JSW subsidiary Shiva Cement to invest ₹1500 crore in new Odisha unit

While ₹1150 crore of the capital expenditure will be funded via debt, JSW will invest ₹150 crore through redeemable preference shares and the remaining through a rights issue

Strong cement prices that prevailed in the northern region throughout the quarter augured well for Shree Cement. Photo: Hindustan Times (Hindustan Times)Premium
Strong cement prices that prevailed in the northern region throughout the quarter augured well for Shree Cement. Photo: Hindustan Times
(Hindustan Times)

MUMBAI: Odisha-based Shiva Cement Ltd, a subsidiary of JSW Cement Ltd, has announced plans to invest over 1,500 crore in a new 1.36 million tonne per annum (mtpa) clinker unit project in Sundergarh district of the state. While 1150 crore of the capital expenditure will be funded via debt, JSW will invest 150 crore through redeemable preference shares and the remaining through a rights issue.

The clinker unit is expected to be commissioned by the end of next fiscal.

For Shiva Cement, a publicly-listed firm, this project includes setting up of a 1 mtpa grinding unit, 8 megawatts of waste heat recovery power plant, 4 mtpa crushing plants at its dolomite and limestone mines. The company will also build a 10 km-long overland belt conveyor to transport limestone from the mines to the manufacturing plant and own railway siding with 12-km long railway track up to Sagra station to ensure seamless transportation of finished goods to the market, a press release from the company said.

Shiva Cement has already received some of the regulatory and statutory approvals and is on track to obtain other necessary clearances. Once commissioned, this clinker unit will service JSW Cement’s manufacturing facilities across the eastern region, making Shiva Cement a strategic hub for JSW Cement’s operations in that part of the country. JSW owns 59% stake in Shiva Cement.

Shares of Shiva Cement were trading 5% higher at 15.68 on the BSE in an otherwise weak market.

For JSW Cement, the new clinker unit being established by Shiva Cement is part of its strategic roadmap to achieve 25 mtpa capacity by 2025. “Shiva Cement’s plan to establish a new clinker unit further reaffirms our group’s commitment to investments in the state," Parth Jindal, Managing Director of JSW Cement, said. “The new clinker unit at Shiva Cement in Odisha will provide a strategic advantage to service the needs of our customers in the region and further strengthen JSW Cement's leadership position in the green cement category in India. We expect to commission the clinker unit by the end of next fiscal."

JSW Cement has manufacturing units at Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha and Dolvi in Maharashtra and uses slag from its steel manufacturing units to produce portland slag cement and ground granulated blast furnace slag.

JSW Cement had initially planned its initial public offer for December but postponed it due to shrinking demand for cement in the past year and the covid-19 pandemic. The deadline for the IPO has now been pushed to December 2022. Jindal said JSW Cement currently has consolidated debt of 2800 crore, which will peak at 3500 crore post the capital expenditure cycle.

Shiva Cement’s clinker project contracts have been awarded to Thyssenkrupp Industries India and Larsen & Toubro, the company said. Thyssenkrupp has been contracted to design and supply a new state of the art 4,000 tonnes per day capacity clinkerization unit and Larsen & Toubro has been awarded the contract for Civil, Mechanical & Refractory erection work of the new clinker unit at Shiva Cement.

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Published: 25 Nov 2020, 01:19 PM IST
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