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India Cements has acquired a coal mine in Indonesia, which isexpected to go on stream by January 2012, for $20 million. The company is alsoin the process of setting up a 50 Megawatt power plant near Tirunelveli inTamil Nadu. The coal mine acquisition is part of its plan to integrate itssupply chain and to reduce exposure to the fluctuating coal priceinternationally. The concern for the industry and for the company is sluggishgrowth of cement, increase in fuel and power cost, higher interest rate. Whilethe input cost have increased 7-8 per cent, output cost rose only two per cent.At present 55-60 per cent of the coal requirement is being met by import.

India Cements is one of the country’s largest cementmanufacturers with a capacity of around 15 million tonnes. The company reportedaround 30 per cent increase in net sales to Rs 1,092 crore as against Rs 843crore during the same quarter last year. Net profit increased 105 per cent toRs 70 crore as compared with Rs 34 crore a year ago. Despite a four per centdrop in demand across south India, the company managed to post good profit. Itscapacity utilization was around 68 per cent, due to the excess capacity inSouth India, which is currently around 100 million tonnes. Between August andSeptember 2011, the overall sales of the cement industry in Tamil Nadu dropped0.42 per cent, while in Kerala it was 0.24 per cent, Karnataka 2.19 per cent.Andhra Pradesh recorded the highest drop at 17.06 per cent drop.

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