ACC Board consider merger with Gujarat Ambuja, India

ACC Board consider merger with Gujarat Ambuja, India
12 July 2004

The board of Associated Cement Companies Ltd will discuss the company’s merger with Gujarat Ambuja Cement, despite having planned a capital expenditure of about Rs5bn (US$109m) in the current fiscal.

"The board would discuss the issue of merger of Gujarat Ambuja Cement and report to shareholders," ACC chairman Tarun Das said at the annual general meeting on Friday.

He said ACC would not be impacted by the Grasim’s takeover of the L&T’s demerged cement unit.

The capex includes the modernisation of its Chaibasa plant by setting up a new 1.3Mta clinker plant and a 15MW captive power plant at cost of Rs2.85bn, Das said.

The consolidated cement capacity would rise to about 19Mt, he said, adding that the company would set up three ready-mixed concrete units during the year.

ACC also intends to increase the capacity utilisation to about 95 per cent from the present 91 per cent.

It has targeted sales growth of 7-8 per cent this year and about 30-40 per cent growth in the ready-mix concrete business where it was making an capex of about Rs700m, he said.

He said the impact of the service tax rate hike and other announcements in the budget would have a net additional impact of Rs 350 million on the company.

Published under Cement News