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Rs 68 crore net amount outstanding with the central government, says Star Cement

Updated : April 18, 2019 07:30 PM IST

Star Cement received nearly Rs 175 crore towards their freight subsidy claims from the central government. Sanjay Gupta, CEO of Star Cement discussed company’s outlook going forward.

“Total outstanding in the month of March was around Rs 400 crore. We received Rs 157 crore in the month of March. We were expecting one more instalment to come within March only but it got delayed and it has come now which is around Rs 175 crore. So net amount outstanding now is around Rs 68 crore which is left with the central government,” he said.

“The balance of Rs 68 crore—we are expecting—we are going to receive in Q2 of current financial year,” he added.

“We are already a debt-free company. After receipt of this Rs 175 crore, we are having at least Rs 400 crore in cash. We have a grinding unit coming up in Siliguri, 2 million tonne cement grinding unit. The capital outlay for that plant is around Rs 400 crore, we have already spent Rs 75 crore on that project and further investment of Rs 325 crore will be made. The plant is expected to start operations in December-January of current financial year. Clinker capacity as of now is 2.8 million tonne and grinding capacity is 4.3 million tonne. We will be doing a small debottlenecking which will take our clinkerisation capacity to 3 million tonne within this year and the grinding capacity will go from 4.3 million tonne to 6.3 million tonne after completion of this plant,” he added.

“Clinker expansion in Meghalaya is going to come up in FY22. As of now, for the grinding unit and for the small debottlenecking in clinkerisation, which we are doing – we do not expect to raise any money. Clinkerisation plant of 2 million tonne which we are planning to bring in Meghalaya will take around 24-30 months to complete. There can be some debt but we are already generating a healthy beta year after year. So we don’t see there is any significant debt on the books of the company,” said Gupta.

Speaking about volume growth, he further mentioned, “In FY19 we have done 2.7 million tonne in terms of cement volumes. We expect at least to do around 20 percent volume growth in FY20.”

Key highlights

Subsidy outstanding post payment is at Rs 68 crore

Have net cash balance of Rs 400 crore; will use it for expansion at Siliguri

Expect to increase grinding capacity to 6.3 mtpa from current 4.3 mtpa

Clinker capacity will be enhanced via de-bottlenecking from 2.8 to 3 mtpa

Expansion will be done via internal accruals and existing cash balance

Do not expect significant debt on books for expansion

Expect sales volume growth of 20% in FY20, to 2.7 mt

Prices in the eastern region have picked up from March 2019

Price rise in northeast region has been stable, up by Rs 5-7 per bag
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