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Target is to increase the capacity to 40 mt in the next 4-5 years: Benu Gopal Bangur

Avishek Rakshit / Kolkata 29 Sep 16 | 12:42 AM

From a failed initial public offering (IPO) to the billionaires' club with a net value of $5.9 billion, Benu Gopal Bangur, chairman of Shree Cement, has come a long way. At 85 year, he is still charting growth plans for the company. In an interview with Avishek Rakshit, Bangur talks about the challenges he faced and the road map ahead for Shree Cement. Edited excerpts:

Could you chart out the growth of Shree Cement after the Bangur group split?

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I didn't inherit the cement business of our former group but purchased the necessary land and the equipment and went on to set up Shree Cement.

Originally, I had planned putting up two plants of 0.6 million tonne (mt) each in Beawar in Rajasthan. But then we proceeded with a single plant. It was only after 14 years that we built a second plant.

What were the challenges in your initial days?

The real problem was finance at that time. When the IPO was done in 1984, only 30 per cent was subscribed. Share prices after the IPO went down to Rs 6 from Rs 10.

That time was very painful as there were no funds, no cashflow, but whatever commitments we had to the banks, we had to keep them. I had to go to banks for extension of time. While the plant was put up at Rs 60 crore, Rs 36 crore was from loans. Punjab National Bank (PNB) was the banker which supported us for some loan recast and there was also the support from State Bank of Bikaner & Jaipur.

How would you compare the cement business of now and then?

When we started, it was a restricted commodity and the government controlled the distribution while the producers had no right in selling.

As far as the business environment is concerned, I find it is better now than earlier. However, with the new regulations, we find there is some slowdown because it takes five to seven years to purchase land for the plant, and getting equipments. Earlier, putting up a plant was easier, but operations were difficult and now it is just the opposite.

Is Shree Cement on course to realise your dreams?

When the second plant was under the installation phase, H M Bangur was looking into it. The company was growing and I was overloaded with work. He has shared the load and hence the company is growing. I have more free time comparatively as the burden is now shared. It has gone into the right hands.

How much involved are you with Shree Cement, now?

I am participating in board meetings. Any important matter is first discussed and then a decision is taken. I am involved in making strategic decisions. On other issues, my presence is not required, but I am kept informed.

What is your immediate mission for the company?

My target is to increase the capacity from the current 27 million tonnes to 40 million tonnes in the next four-five years and keep the growth pace.

Your net worth has been pegged at $ 5.9 billion. How does it feel?

I feel very happy. The company is doing good. I feel that we'll be continuing the same way. I have no debt or loan, and as a family we have the same way of thinking.

Because, the equity was not subscribed initially, more had to be put by us. We have kept our stake holding in the company at 65 per cent while 35 per cent is traded publicly. Because of our share valuations, the net worth has increased but my lifestyle and mode of working remains the same. These shares (owned by the promoter group) are not saleable.

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