No takers in sight for Cemcorp

No takers in sight for Cemcorp
Published: 16 March 2004

The Indian government’s renewed attempts to privatise the ailing Cement Corporation of India (CCI) has come to naught with no bids being received for the company’s nine cement plants. Only two cement makers - ACC and the little-known Deccan Cements - submitted bids for the 0.2Mt Rajban cement unit of CCI. There were, however, no bidders for CCI’s nine other manufacturing facilities, only two of which are operational. SBI Capital Markets, advisor to the operating agency IFCI, had invited bids for the whole of CCI or any of its nine manufacturing units. The bids were opened late last month, after which the ministry of heavy industries and public enterprises decided to shelve the privatisation plan due to the lacklustre response. "We have recently been told by the asset sale committee set up by BIFR that the privatisation of CCI has been scrapped. The ministry now wants to start the process all over again at an opportune time," said an ACC official.

CCI, which has been referred to BIFR following huge losses, has a total installed capacity of 3.8Mt spread across ten locations. However, just three of the facilities - Tandur (Andhra Pradesh), Rajban (HP) and Bokajan (Assam) - are currently operational. The company’s Tandur unit is the largest with a capacity of one million tonnes, although its capacity utilisation is barely 10 per cent. Industry observers say the poor response to the privatisation plan, which was the second attempt by the ministry, is due to the unviable size of the manufacturing units, recurring labour problems and locational disadvantages.