Cement sector set for growth:
Sohini Das / Kolkata January 01, 2008
The year ahead looks especially promising for the cement companies in the region, with most of them gearing up for capacity expansion and marketing drives.
Cement production in West Bengal grew by 8.4 per cent compared to an India average of 9.8 per cent during 2006-07.
Cement production in the state has been steadily rising, registering a 5.5 per cent rise during 2005-06.
The current capacity in West Bengal stands at nearly 4 million ton per annum.
The major producers in the state are poised for expansion plans, with Gujarat Ambuja setting up a 1 million ton per annum (mtpa) cement plant at Farakka in Murshidabad, Lafarge adding a greenfield unit (1mtpa) at Bankura, together with Durgapur High Tech Cement in the process of adding another 1mtpa capacity adjacent to their existing plant in Durgapur.
Kolkata-based cement major, Shree Cement is investing Rs 2000 crore in setting up an integrated 6 mtpa cement plant together with a 50MW captive thermal power plant in Katni district of Madhya Pradesh.
The project period for the Katni plant is two and a half years.
The current capacity of Shree Cements is 8mtpa, and the company plans to take it up to 10mtpa by March 2008.
Sources in the company said that it was waiting for getting the official lease license for the limestone reserves at Katni, which was expected in a year's time.
According to company officials who do not want to be identified, Shree Cement is looking at opportunities in Andhra Pradesh, Karnataka, Orissa, apart from Madhya Pradesh and Chhattisgarh, for setting up manufacturing units as a part of its major expansion drive.
It plans to take up its capacity to 20mtpa by 2012.
On the other hand, south- Indian cement major Madras Cements Limited(MCL), a flagship company of the Ramco group, aims at capturing 7 to 8 per cent of the market in West Bengal with its upcoming grinding mill at Kolaghat in East Midnapore in 2008.
The plant will have initial capacity of 950,000 ton per annum, that will be scaled up in the coming three years to 2mtpa.
The first phase investment in the project is around Rs 105 crore, to be released by the end of this year.
The unit that was scheduled to be commissioned by August 2008, is behind schedule by 3 months, owing to delays due to the monsoons, informed A K Paul, general manager, project & unit head at the plant at Kolaghat.
Several eastern Indian companies went in for initial public offerings (IPOs), like Burnpur Cements limited and Barak Valley Cement Ltd (BVCL).
BCL raised Rs 26.28 crore from the maiden IPO by offering 2,19,00,000 shares, diluting 48.39 per cent of promoters' stakes.
The money raised will be used to part-fund its one million tonne greenfield cement plant to be set up at Patratu, Jharkhand with an investment of Rs 120.9 crore.
The facility at Patratu will be a 800 ton per day clinkerisation and grinding unit that will be scaled up to 1600 ton per day, said A Pande, chairman of BCL.
The Asansol facility of the company is only a grinding unit with a capacity of 0.3 mtpa, that currently utilises only 50 per cent of its capacity.
This is because the company buys clinker from local suppliers, which results in intermittent supply as well as lowers profit margins, said A Gutgutia, vice chairman and managing director of BCL.
It planned to scale up our Asansol facility to include an additional 1 million ton grinding facility.
The Patratu plant, due to start commercial production by end of 2008, will start with 0.5 mtpa capacity and will be eventually scaled up to 1 mtpa.
The plant will produce both Portland Pozzolana Cement(PPC), Ordinary Portland Cement(OPC) together with Portland Slag Cement.
In the second phase of investment, BCL plans to come up with a 50MW power plant at the Patratu facility with an investment of Rs 250 crore.
The second phase will be starting early 2009.
The company wants to scale up its cement capacity to 10 mtpa in the next ten years, and has plans of setting up units in Jharkhand, Bihar, Uttar Pradesh, and Nepal.
BVCL has recently gone for an IPO as the first company in the North-East planning to raise over Rs 20 crore to finance expansion of clinkerisation capacity from present 420 ton per day (tpd) to 600tpd, and cement grinding capacity from 460tpd to 750tpd, and for setting up a 6MW captive power plant, together with meeting working capital requirements, Chamaria said.
This apart, Ambuja Cement sales grew 11.8 per cent during 2006-07, while Ultra Tech and ACC grew by 8 per cent and 6.4 per cent respectively.
The major producers collectively accounted for nearly 88 per cent of the cement produced in the state.
The medium sized plants in the state recorded positive growth as well, production up by nearly 10 per cent.
ACC chose the East for launching its new building solutions venture, foundation to roof cement(F2R).After a successful pilot run of F2R cement,
ACC aimed to romp up its marketing to support this new product in eastern India.
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