Gujarat Ambuja plans captive agro-fuel based power plants

GUJARAT Ambuja Cements Ltd is setting up two captive power plants, a 24 mega-watt plant in Punjab and a 60 MW plant in Gujarat that would run on both coal and agro-based fuels.  This would perhaps be the first time that a cement producer is setting up an agro-based power plant, said Mr Anil Singhvi, Executive Director, Gujarat Ambuja Cements Ltd.  The plants will be set up at a total cost of Rs 265 crore.  While the Punjab plant will be set up by the end of the company’s current fiscal, the Gujarat plant is likely to take longer, said Mr Singhvi.

The agro-based fuels that will be used are rice-husk and groundnut shells. The latter will be abundantly available in Gujarat, the peanut bowl of the country, said Mr Singhvi.  In addition to these two plants, there is a 15 meg-watt plant planned for subsidiary Ambuja Eastern Cement Ltd.

Gujarat Ambuja has witnessed a sharp rise in power and fuel costs during the quarter ended September 30, 2004 with expenses amounting to Rs 159.79 crore as against Rs 97.35 crore during the corresponding quarter of the previous year.  In addition to the cheaper agro-fuel, Gujarat Ambuja is also increasing its efficiency of power use, said Mr Singhvi.

The consumption of power per tonne of cement produced has gone down to 86 units during the quarter currently ended, down from 89 units in the same year-ago quarter, said Mr Singhvi.  If one were to calculate the cost of power at Rs 2.5, then the company saves around Rs 7.5 per tonne, which makes a difference of a couple of crore when one considers a quarterly production of 3 million tonnes, Mr Singhvi pointed out.

The company is still scouting for acquisitions and would likely have something to announce along those lines in six months’ time, he said.  Earlier this year, the company had announced an outlay of Rs 1000 crore for acquisitions to be made within a period of a year-and-a-half.