Cement major India Cements has agreed to sell one of its properties (73.7 acre) to another leading cement manufacturer UltraTech Cement for a consideration of Rs 70 crore.
The leading cement manufacturer informed the BSE that it has entered into an agreement with UltraTech Cement Limited for the sale of land measuring 73.7 acres, which includes 14.5 acres to be procured, in Vizianagaram, Andhra Pradesh for Rs 70 crore, exclusive of taxes, stamp duty and registration charges. It comes a year after India Cements divested its wholly owned subsidiary, Springway Mining Private Limited (SMPL), to JSW Cement Limited for a total consideration Rs 476.9 crore, which generated profit on sale at Rs 294 crore.
Earlier in the day, India Cements vice chairman and MD N Srinivasan told the shareholders at the 77th annual general meeting through video conferencing that it would continue to look at ways to monetise it's assets to help overcome liquidity issues. The cement and clinker sales of the company was at over 26.6 lakh tonnes in the first quarter (of FY24) compared to 27.8 lakh tonnes in the fourth quarter of the previous year. “The lower sales were mainly due to the liquidity crunch faced by the company consequent to lower margins and losses. Still, it continued to improve its performance during the quarter,” he said. Variable costs continue to be high for the company compared to peers and necessary action has been initiated to address it, he added.
He further said, the cement industry in the south has excess capacity to meet the demand from housing and infrastructure sectors. However, the continuing UkraineRussia war and its impact on the supply chain position of coal and petroleum products remain a cause for concern as this could have a long-term influence on the price of fuel and oil. Therefore, margins are expected to come under pressure with rising operational costs, intense competition in the market and logistics and supply chain constraints, he added.
