Big cement firms target UP, India

Big cement firms target UP, India
Published: 07 June 2006

Gujarat Ambuja Cement and Grasim Industries Ltd are in the process of setting up a flyash-based cement plant each in Uttar Pradesh. Both the plants are to be set up in Dadri near Greater Noida. 

JP Cement, another big player in the cement industry, has already acquired the Dalla, Churk and Chunar cement plants in Mirzapur district, earlier owned by the PSU, UP Cements Corporation. JP group had acquired the two plants for Rs 459 crore in open auctions conducted under the mandate of the Allahabad high court. 

Gujarat Ambuja Cement Ltd, owned by Suresh Neotia, is in the process of setting up a flyash-based cement plant with an annual production capacity of 120,000 tonnes. The cement unit would source the flyash from the nearby Dadri super thermal power plant of the NTPC. Gujarat Ambuja would initially invest Rs 125 crore. The cost of the plant and machinery is estimated to be Rs 76 crore. The plant would come up on 78 acres of land at Dadri. The land for the project is being acquired by the UP State Industrial Development Corporation. 

The company would also develop the railway siding at the plant site for the transportation of raw material as well as finished product. The company also has plans to set up 2 x 6mW captive power plant for meeting the electricity requirements of the plant.

Grasim Industries of the Aditya Birla group is also setting up a flyash-based cement plant with annual capacity of 120,000t at the village of Bisara in Dadri. The unit is being set up by Birla Plus Cement Ltd, and the company will invest Rs 117 crore. UPSIDC is in the process of acquiring land, measuring 66 acres, for the plant in Dadri. The Birla cement unit will provide direct employment to 331 people. 

 Sources in Grasim Industries Ltd said they feared cost and time overrun in the plant as the UPSIDC has delayed the land acquisition by six months. "Even if the land acquisition is expedited, the process, including the handing over of the land to the company, would take another six months," a source said. 

 UPSIDC Chief Engineer Arun Mishra said the process of land acquisition was on and both the companies were satisfied with the progress. 

 It may be recalled that JP Cement had acquired the UP Cement Corporation’s (UPCC) plant in a closely contested bid in January last. JP Associates, better known for JP Cement, was the highest bidder with Rs 459 crore. The other bidders were Lafarge India Pvt Ltd (Rs 271 crore), Dalmia Cement (India) Ltd (Rs 271 crore), and Grasim India Ltd (Rs 271 crore), an Aditya Birla group company. 

 The high court had fixed Rs 271 crore as the reserve price for open bidding. Grasim India, however, backed out at the eleventh hour and did not participate in the bidding process. 

 The UP government also generously contributed in the revival process of the closed PSU. The state government has written off the outstanding government loan of Rs 165 crore, besides the unpaid power dues of over Rs 100 crore and an unsettled amount on account of trade tax and royalty on lime stone, the raw material mined by the cement unit.State government has also given an undertaking to exempt the unit from trade tax and royalty on limestone for the next 10 years.