Palnadu Gains New Cement Capacity As Andhra Expands
Andhra Cements has begun commercial operations at its expanded grinding facility at Durga Cement Works in Dachepalli, Palnadu district, taking capacity from 1.82 million tonnes per annum (MTPA) to 3 MTPA. The commissioning adds production headroom in a region where cement demand is linked closely to housing, roads and public infrastructure, while raising questions about utilisation, pricing and the environmental cost of additional output.Â
The expansion is the final major stage of a modernisation programme approved in January 2024. The plan included increasing clinker capacity from 1.65 MTPA to 2.30 MTPA and installing a new six-stage preheater. The preheater was commissioned in October 2025, while work on the cement mill continued before the latest commercial launch. For the regional construction economy, the additional grinding capacity could improve the availability of cement closer to projects across Andhra Pradesh and neighbouring markets. However, higher installed capacity does not automatically translate into stronger financial performance. Producers still depend on transport costs, local demand, utilisation rates and prevailing cement prices.
That distinction is important for Andhra Cements grinding capacity, as the company entered the new operating phase with a weak recent financial position. In the quarter ended June 2026, revenue from operations stood at ₹142.17 crore, while the company reported a net loss of ₹35.93 crore. The figures underline the need for the expanded plant to generate sufficient volumes and operating efficiency rather than simply increasing its production potential. The plant’s location also brings a wider infrastructure consideration. Cement is fundamental to urban expansion, transport networks and housing, but production remains energy- and resource-intensive. For Andhra Cements grinding capacity, the longer-term test will therefore include how efficiently the additional capacity is used, how material is transported and whether modernised equipment can reduce fuel and resource intensity.
The expansion comes as Andhra Cements moves towards a proposed amalgamation with parent company Sagar Cements. The boards approved a merger scheme in June 2026, subject to regulatory and other required approvals. For Palnadu and the wider southern cement market, the immediate issue is not simply how much more cement can be produced. The next phase will show whether the investment can support financially sustainable operations while meeting infrastructure demand without adding unnecessary pressure to energy, transport and environmental systems.
