New Delhi,News Today,26th November 2020: Shiva Cement Ltd (Odisha) a subsidiary of JSW Cement Ltd, plans to invest over Rs 1,500 crore in a new 1.36 million tonne per annum (mtpa) clinker unit project in the Sundergarh district of the state. While Rs 1,150 crore of the capital expenditure will be funded via debt, JSW will invest Rs 150 crore through redeemable preference shares and the remaining through a rights issue, the company said Wednesday.
The publicly listed firm, Shiva Cement, has already received some of the required regulatory and statutory approvals, and is on track to obtain other necessary clearances. The clinker unit is likely to be commissioned by the end of next fiscal.
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-spanning West Bengal, Jharkhand, and Bihar. JSW owns 59 per cent stake in Shiva Cement.
“Through this investment we hope to contribute to the overall economic development of Odisha as well as create new direct and indirect job opportunities,” said Parth Jindal, Managing Director of JSW Cement.
JSW Cement had earlier planned its initial public offer for December but had postponed it due to shrinking demand for cement over the past year and the pandemic. “In 2019, the sector had seen a de-growth, then in 2020, Covid hit us. Now, December 2022 is a logical timeline for us for the IPO,” Jindal pointed out.
The company has drawn an ambitious plan to expand its combined cement capacity to 25 million tonne by 2023 from 14 million tonne at a capital expenditure of Rs 3,600 crore. Currently, JSW Cement has a consolidated debt of Rs 2,800 crore, which would peak at Rs 3,500 crore to fund the fresh capex cycle. Cumulatively, domestic cement production has fallen by 25.1 per cent during the first half of fiscal year.