GACL increasing capacity of captive power to save costs

Gujarat Ambuja Cements (GACL) has embarked on an expansion of captive power capacity at its various plants. In what would be a cost saving exercise, the company has earmarked Rs 225 crore to set up 75mw of new captive power plants at its various units. Of this, 30mw capacity would be coming up at each of the cement plants at Punjab and Gujarat, while a 15mw captive plant would be set up at Ambuja Cement Eastern, an associate company. All these would be thermal power plants. This is expected to result in saving of over Rs 100 crore to the company. GACL had made a net profit of Rs 222 crore in the last fiscal, so the saving would result in substantive (55 per cent) contribution to the bottomline. "We expect the new plants to be set up within 12-15 months. This will make power available to our plants at half the grid cost," according to GACL executive director Anil Singhvi. Analysts expect this to further strengthen Ambuja’s position as one of the lowest cost producers in India.