ACC temporary plant closure update

ACC temporary plant closure update
Published: 18 December 2008

Business Standard reported that ACC has become the first victim in the domestic cement industry to shut one of its plants in Himachal Pradesh for 15 days effective from Tuesday. The decision has come within a month of ACC Concrete laying off 25% of its employees.

The capacity of the plant at Gagal- II is 4800tpd  and on an annual basis it is 2.4Mt. It has another plant as Gagal- I with a capacity of 2Mt. Normally, cement makers shut their units during monsoon season for around 2 to 3 weeks period for repairing and maintenance purposes.

Mr J Datta Gupta CCO of ACC said that "Poor cement demand in both Himachal Pradesh and Punjab on account of the economic slowdown has resulted in increase of clinker stocks at our Gagal works in the state, necessitating a shutdown of manufacturing operations for balancing the clinker stocks."

The latest updates from Cement Manufacturers’ Association said that in Punjab and Himachal Pradesh, the cement consumption has shown a de growth of 14% and 10% respectively between April and October.

ACC in a statement said that moreover, the duty free and counter-vailing duty free imports from Pakistan has resulted in the clinker stock at Gagal plant of the company. It added that the India government could also consider rationalizing the cement excise duty structure, as well as providing abatement of at least 40% as is the case with many other commodities.

As per report, a fortnight back, voluntary production cuts by cement makers was on the card. Mr HM Bangur president of CMA said that companies which could not sell their produce might go for voluntary cuts in production.

Mr Bangur said that "Cement makers in the North are being forced to do so due to the imported cement from Pakistan. He said that moreover, coming up fresh capacity is another factor. We do not need any protection but want a level playing field in the market." Presently, Pakistani cement is available at a subsidy of INR 60 per bag.

Mr AL Kapur MD of Ambuja Cements said that ACC’s sister company Ambuja Cements also has a plant in Himachal Pradesh at Darlaghat with a capacity of 1.6 million tonne per annum. Considering that Ambuja could follow suit, he said that "We will not and will never shut down our units."

ACC, part of Holcim, produced 18.93Mt of cement so far in the calendar year against 18.34Mt last year, up by 3.22%. On the other hand, the 206.46Mt cement industry as a whole produced 6.64% more at 115.38Mt so far in FY 2009 against 108.20Mt produced in the same period last year.