India: ACC may invest in ready mix concrete businesses

India: ACC may invest in ready mix concrete businesses
Published: 16 July 2008

Associated Cement Companies (ACC) plans to double its number of readymix concrete units to 46 this year. The ACC spokesperson confirmed the development, but declined to divulge the investment on this initiative. Sources said the company would need to invest Rs 150 crore to achieve this target.
ACC’s managing director, Sumit Banerjee said recently, "RMC is the future business as margins are higher compared to retail. Bulk users in the real estate business increasingly use RMC to save on time and cost overrun in projects."
In order to scale up its RMC business, ACC transferred this unit to a wholly-owned subsidiary ACC Concrete. Last year, the company earned Rs 367.02 crore from the business. However, RMC’s contribution to the company’s total business is not much. ACC posted total sales of Rs 7,067 crore last year.
Lafarge is the country’s largest ready-mix concrete maker with business of approximately Rs 1,000 crore. The Aditya Birla group is also increasing focus on RMC by increasing its network to 94 from the existing 22 in the next few quarters with Rs 560 crore investment.
ACC’s total capacity is being hiked to 23.3 million tonnes per annum (mtpa) from 22 mtpa by this year. It has 12 plants across the country and is the leader in eastern and north Indian markets. ACC Concrete is replicating the Holcim process of RMC solutions in India. These solutions include products which aid in construction techniques, speed of building and utilising sustainable construction materials. Holcim, through its private subsidiary ACIL, holds 46% stake in ACC.