"Recently, demand for cement in the country as a whole picked up and if the situation continues to remain what it is for the next couple of months, we will do the needful to increase our existing capacity from 20 lakh TPA," said a company official. The company, however, had at present no plans of setting up a greenfield project and would instead either opt to increase its own capacity or may go in for an acquisition.

"We have got sufficient limestone depots, which comprises of the main raw material, and we are in a position to increase production almost at will, so we do not have any proposal at present for going in for greenfield projects," said the official. He said there was also no plan with the company to improve capacity till the cement market improved and stabilised.

The official said that the cement industry as a whole is passing through a difficult period and if the government did not announce commencement of infrastructural projects soon, the recent upward trend in demand might not sustain.

The official was confident that various infrastructural projects were in the offing as according to him no government could afford to ignore the core sectors like cement, steel and power for a long. "In any country if the economy is to improve, sooner or later, the government will have to give allocation for core sectors and with the recent commitment of prime minister regarding infrastructural projects, we are looking forward for a fast recovery," said the Kesoram official.

The company had two cement plants, one each in Andhra Pradesh and Karnataka, with capacity of nine and 11 lakh TPA respectively, and both plants performed at 109 per cent capacity utilisation but profitability was adversely affected due to severe recession and lack of understanding among the players and the market. The upward trend in cement, helped the company record a sharp jump in net profits to Rs 9.48 crore (Rs 2.37 crore last year) during the second quarter of 2000-2001, even as net sales increased to Rs 327.86 crore from Rs 166.65 crore.

Commenting on the real estate venture, the official said separation of its textiles unit as a subsidiary company and improvement in its tyres and cement businesses led to increased profitability. The officials said, property of the textiles division now lying vacant, would be developed, it had not yet finalised whether the company will do that or will give it to some other company for development. As per a scheme of arrangement, two companies were formed within the textiles division for real estate business, as it did not want to distract from the core business. The company had two plots of land, one near the textile factory, but outside the factory complex, and the other in the outskirts of the city. The present market value of the land is about Rs 11 crore.