Orient Paper plans cement plant in Karnataka

Mumbai : Orient Paper & Industries(OPIL) is likely to set up a cement plant in Karnataka with annual capacity of 4 million tonne (mt) as it aims to double capacity to 10 mt in five years. The CK Birla group's diversified company has acquired land in the state and has sought for environmental clearances for the Rs 1,500-crore project, said a person privy to the development requesting anonymity. Managing director ML Pachisia said the company does not comment on market speculation.

Orient produces 5 mt cement in Andhra Pradesh and Maharashtra, which consume a combined one-fifth of the country's cement demand. It has two brands - Birla A-One and Orient Gold. Cement accounts for 65% of sales and 80% of profit of the diversified company, which is also into paper and electrical businesses. It posted net profit of Rs 55 crore on sales of Rs 553 crore in August 2011.

Orient's cement division is among the most profitable in the Indian cement industry, aided by locational advantage of its plants and high-quality limestone reserves, said Rupesh Sankhe, research analyst with Angel Securities.