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Jaypee Cement chalks out Rs 3,500 crore expansion plan; ropes in Tendulkar as brand ambassador

Jaypee Cement, India’s leading cement brand, has chalked out plans to invest around Rs 3,500 crore to increase its production capacity in the ongoing financial year. Meanwhile, the amount is part of the Rs 10,000 crore investment earmarked by Jaypee Cement for its growth plans. The company, according to its top official, has already spent Rs 6,000 crore.

“A part of the corpus of money has been raised through foreign currency convertible bonds (FCCB). The company plans to add 25 million metric tonnes production capacity by 2011 fiscal-end. Of this, the company will have close to 10 million metric tonnes cement production capacity by the end of October 2009,”said Manoj Gaur, executive chairman of Jaypee Group.

At present, the company produces close to 15 million metric tonnes. A large part of the capacity addition will come through greenfield projects and the rest through acquisitions. However, Gaur refused to share details on the acquisition plans of the company.

Gaur said that given the current stress on infrastructure and construction business in smaller cities, the demand for cement is bound to increase in the future. “Our capacity addition plans are in tune with this reality.”

Meanwhile, in a bid to promote its cement brand, the company has for the first time roped in a brand ambassador by signing cricket icon Sachin Tendulkar. Tendulkar will be the face of the brand through a long-term contract signed by the company. In fact, even in the face of slowdown, wherein the companies are cutting down on expenditure, Jaypee Cement to plans to invest over Rs 50 crore to boost its branding positioning this year.

“We have been seeing growth in our business. And we feel that now is an appropriate time for us to have a brand ambassador. It is a planned move and will not affect our costs adversely,” said Gaur. Gaur, however, did not divulge any details about the endorsement fee of the cricketer, nor did he specify the number of years Tendulkar would endorse the Jaypee brand of cement.

The company, after its association with Tendulkar, plans to develop a stadium and also start a cricket academy, said Gaur.

April 15, 2009