India’s largest electricity producer, NTPC Ltd, will manufacture cement near six of its power plants through ventures with private firms, said a top official.
“We are looking at equity-participation from private sector companies, the percentage for which will be decided (later),” said T. Sankaralingam, NTPC chairman and managing director.
“All leading private sector cement manufacturers have shown interest. Depending upon the logistics and the discussions, the investment details will be firmed up.”
Analysts say a cement plant capable of producing 1Mta costs around Rs400 crore to build.
Power sector analysts see this as an attempt by NTPC to better utilize the 43mtpa of fly ash its coal-fired plants produce, only half of which the company is able to dispose of safely. Indian coal contains high levels of ash that harms the environment.
NTPC can utilize the fly ash better by making cement.
The move will not only save the company costs of transporting and safely disposing the fly ash, but also enable it to save 5-10% in cement production costs, since making cement by using ash is cheaper that the usual method based on clinker, or powdered cement.
NTPC will set up the units near its power plants at Badarpur in New Delhi, Sipat in Chhattisgarh, Ramagundam in Andhra Pradesh, Barh and Kahalgaon in Bihar, and Rihand in Uttar Pradesh.
While Sipat and Barh are yet to be commissioned, the other plants generate around 8mtpa of fly ash.
The company has already issued expressions of interest to form joint ventures and received responses from 11 firms. It plans to sign memorandums of understanding for the ventures by September.
NTPC is the second power producer to eye cement making.
Reliance- Anil Dhirubhai Ambani Group also plans to manufacture cement by setting up a plant near its 4,000MW coal-fired project proposed at Sasan in eastern Madhya Pradesh, as reported by Mint on 28 September.