Addressing a news conference, Srinivasan said there would be further consolidation in the industry which had 59 cement companies and 117 plants. "We do not plan any more takeovers... let us first digest the recent acquisitions," he said.

During the last eighteen months, in addition to the 1.8 million tonne capacity of Raasi Cements, the company acquired the 0.4 million tonne Yerraguntla plant of Cement Corporation of India and 100 per cent equity in the 0.9 million tonne plant of Visaka Cements, through group companies.

In the current fiscal, the cement division of Raasi with Indian Cements will be merged, he said. Tofinance the Raasi acquisition, the company is launching its 1:1 rights issue at a price of Rs 25 per share (Rs 15 premium). It will be borrowing Rs 180 crore and privately place shares worth Rs 54 crore.

Despite the present recession, Srinivasan said that he is bullish on the sector as the entire present capacity of the cement industry will not be able to meet the demand from the infrastructure sector projects and housing needs. "Our company will focus only on cement industry which will start recovering as soon as prices stabilise," he said.

The managing director said the domestic cement industry will grow riding on the housing boom alone which is growing at a rate of seven to eight per cent per annum and no large additional capacity being planned on the supply side.

On Raasi acquisition, Srinivasan said that the company expects a host of advantages consequent to the acquisition. "The acquisition of Raasi, a strong brand in Andhra, has added to our portfolio of powerful brands, such as `Sankar' inKerala and `Coromandel in Tamil Nadu.

The cost of acquisition at Rs 445 crore is low compared to the cost of setting up a plant of similar capacity. We now have a capacity of 7.5 million tonnes on an equity of just Rs 120 crore," he said.

The company also expects to achieve substantial savings in labour, power and fuel costs through VRS and rationalisation of labour and the ongoing energy conservation measures.