Tokyo Cement in US$ 1m new expansion project

Leading cement manufacturer, Tokyo Cement rolled out a major expansion project with an investment of US$ one million. The project consists of one million capacity power plant at Trincomalee, a 10 megawatt power biomass plant and purchasing a vessel as well. The project will take place in stages and the manufacturing plant will be commissioned initially as the BOI has instructed them to construct the manufacturing plant first.The manufacturing plant accounts for around 25 percent of the investment and will be commissioned in Financial Year 15 and the biomass power plant component will be five percent of the total investment, Softlogic Equities Research said. At present the company's two existing plants, one Colombo and other in Trincomalee, has a capacity of two million tonnes, and with the addition of a new plant adjacent to the Trincomalee plant its total capacity will go upto three million tonnes per year. The margins to rebound to historical levels of 20 percent from FY 15 onwards on a conservative note and the cost of saving from investing its own vessel is US 4 to 8 per metric tonne. The company is also planning to build a private jetty in Trincomalee as well. The company's gross margin to improve during the Financial Year 14 E with the dip in clinker prices over the year, which was Year on Year 23 percent growth for FY 14 E due to stable clicker prices, currency fluctuations. The reason for their expansion is due to the increase in the cement demand. Adouble digit growth from 2009 to 2013 has been recorded, which is a 10 percent overall growth in the business, research indicated. With these new developments the company has registered a profit of Rs 1.7 billion for nine months and with this 128 percent growth the company will record a Rs 2 billion profit. Tokyo Cement enjoys a market share of 34 percent and with its new business strategies the company is able to reach the North, East and the Central areas in the country. The company being a listed company in the Colombo Stock Exchange has 334 million voting and non voting shares. http://www.dailynews.lk