BENGALURU, May 21 Reuters India39;s JSW Cement said on Tuesday it will invest around 30 billion rupees 360.2 million to set up a cement factory in the northern state of Rajasthan, in a bid to meet surging demand for the key construction material.

Indian cement makers are ramping up production amid higher government spending in infrastructure and a healthy real estate market.

Market leader UltraTech Cement said last month it will set aside 3.9 billion for ongoing capital expenditure over the next three years.

JSW Cement39;s proposed unit will supply cement to Rajasthan, Haryana, Punjab and the national capital region, marking the firm39;s entry into the country39;s northern market, which is dominated by Shree Cement and UltraTech.

JSW Cement39;s investment in Rajasthan is a move that will give it access to rich limestone reserves in the state as well as put a lid on freight costs, aiding its core profit margins, said Ashutosh Murarka, research analyst at Choice Broking.

The company is still a new kid on the block and larger incumbents can derive comfort from that, Murarka added.

According to its latest annual report, JSW Cement conducts its business in the eastern, southern and western regions of the country.

The new cement facility will include a clinkerization unit with capacity of up to 3.30 million tonnes per annum MTPA and a grinding unit with a capacity of up to 2.50 MTPA, the company said in a statement.

JSW Cement will fund the investment through a mix of…