Thursday, February 7, 2008

KCP diversifying into hospitality sector

Chennai, Feb. 6 KCP Ltd has announced a Rs 390-crore expansion programme that would see it diversify into the hospitality industry and expand its existing lines of business — cement and foundry.

Mr Velagapudi Lakshmana Dutt, Chairman, KCP Ltd, said that the company is looking at exploiting real estate and the resources available with the company through these projects. The company will fund over 30-40 per cent of the expansion programme through internal accruals and the balance with borrowings.

It will invest Rs 40 crore to set up a 80-room hotel in Hyderabad at Somajigudda, an important commercial centre. It will be a ‘3-star plus’ facility, which the company hopes to start operating by October 2009. KCP will complete the construction work on the project before finalising a management contract with hotel chains, Mr Dutt said.

The company is setting up an 80-lakh tonne-a-year cement plant at Mukthyala in Krishna District, Andhra Pradesh, at a cost of Rs 280 crore. This plant is expected to start production in March 2010. The company now operates a 6-lakh tonne-a-year plant at Guntur District, where it has completed a modernisation programme.

Finalising suppliers

The company is finalising the suppliers for the project and it is an advantage that KCP makes its own key equipment such as the mill, kiln and preheaters at its foundry, which it is expanding, he said.

At its foundry in Tiruvottriyur in North Chennai, KCP is investing Rs 70 crore to expand its capacity to handle larger casting and meet the demands of a growing market. It manufacturers equipment for sugar, cement, steel and power industries.

The foundry now has a capacity handle about 40 tonnes of liquid metal, which means castings of about 25-30 tonnes. This would be expanded to 90 tonnes liquid metal handling for castings of about 45-50 tonnes.

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