The INR2500-crore joint venture cement plant of Sagar Cements and France-based Vicat Group is set for financial approval and the construction work is likely to begin soon.
“The acquisition of 1600 acres for the first phase of the project is completed in Gulbarga, Karnataka, and we are awaiting registration approvals from the Government for another 1200 acres to be used for the second phase,” S Srikant Reddy, executive director of Sagar Cements, told Business Line.
Under a joint venture pact signed in June last year, the Hyderabad-based company and Vicat will have 49:51 per cent stake in the proposed company which will have a capacity of 5.5Mt.
Of the INR1650-crore investment outlined for phase one, INR1000 crore will be debt and INR650 crore equity. The financial closure is the responsibility of Vicat. “I understand that all the commitments have been obtained and the paper work is remaining,” Mr Reddy said.
The joint venture partners target to commence operation of the plant in September 2011. “The second phase is likely to be operational by 2014,” he said.