ACC plans major investment

ACC will pump in around US$100m in three years to push its annual cement production capacity to 27.5Mt. This will be an increase of over 38 per cent over the company’s current capacity of 19.9Mt

The capital expenditure will be between 2007 and 2009. This includes plants in New Wadi in Karnataka and Bargarh in Orissa.

The company already has completed the expansion and modernisation of its Lakheri plant in Rajasthan this year.

“The three years capex plan is of Rs 4,000 crore. The Lakheri plant has been commissioned and is undergoing trials. In April, it will start commercial production,” said N S Sekhsaria, chairman, ACC, addressing the shareholders at the company’s 71st annual general meeting.

The company has approved a capital outlay of Rs 1487 crore to increase the clinkering capacity at the New Wadi plant with additional cement grinding facilities in Karnataka and a captive power plant of 50mW capacity.

The project will enhance the cement maker’s capacities by further 3 million tonne.

Other projects to be completed in 2007 include grinding augmentation at Tikaria in Uttar Pradesh and Kymore in Madhya Pradesh. In 2008, the company would complete the augmentation of cement grinding capacity at Madukkarai in Tamil Nadu by 0.22 million tonne and the capacity of the Bargarh plant in

Orissa would be scaled up to 2.14 million tonne, said Sekhsaria.

However, he ruled out any greenfield projects. On the question of merging the Ambuja Cements with ACC, he said, “No plans at present.”

As the country is currently facing a mismatch between demand and supply of cement, ACC has stopped exports. “Cement exports have been stopped on the back of rising domestic cement demand,” he said. On cement pricing, he said that the demand supply gap was very small and “expect the market to be stable”.