Kolkata-based Shree Cement Ltd’s (SCL) upcoming cement project in Madhya Pradesh is being delayed due to land procurement issues.
Shree Cement, the Rs 1,500 crore company, has acquired almost 90% of the required 1,200 acres in Katni in Madhya Pradesh for the plant, but is facing problems over the acquisition of around one acre land in the middle of the project area, which the farmers do not want to sell, a source close to the development said.
The company is talking with the Madhya Pradesh government to sort out the issue, but the latter is reluctant to take up the matter speedily, considering the spate of violence and protests that has rocked different parts of the country over similar issues.
Earlier, India Cement’s Himachal Pradesh project had faced problems in land procurement.
H M Bangur, managing director, Shree Cement told DNA Money, "There are some minor issues with farmers of a small portion of land, which can be sorted out soon."
The new plant was earlier expected to come onstream by 2010 and add 4Mta of cement capacity. The company aims to produce 20Mta cement by end-2012.
About start of work and commissioning of the plant, Bangur declined to give any response at this stage and said, "We can’t say when the plant would be commissioned unless and until the work would start."
Bangur said that the company would bring Rs600 crore of investment in the project through internal accruals and the balance Rs1,400 crore would be through borrowings. It has also envisaged large-scale employment of local people which would include direct employment to 600 local people.
Shree Cement, which runs the largest single-location integrated cement factory in northern India, has ambitious expansion programme for its MP project.
The company said its January shipments rose 40.59% to 5.8Mt from 4.09Mta earlier. The total shipments between April 2007 and January 2008 rose 24.8% to 4.93Mt from 3.95Mt in the same period a year ago.
Meanwhile, a new greenfield project and an 18MW coal-based power plant at Ras village in Rajasthan, which is under execution, will start commercial production by the second quarter of 2008.
The company can produce 8Mta at its plant in Rajasthan. It has set up two grinding units at Khushkhera of 2Mta and 1.5Mta capacities, making the firm with single largest grinding capacity in the country.
The company gets the maximum business volumes from Rajasthan, Punjab, Haryana western Uttar Pradesh and Uttaranchal.