Gujarat to get 2 new cement projects after 10-year lull

August 7th, 2008 - 8:03 pm ICT by IANS  

By P.S.Anantharaman
Ahmedabad, Aug 7 (IANS) After a lull of nearly a decade, two large greenfield cement projects are coming up in the western Indian state of Gujarat. This will be the first major new activity on the cement front in the state after the commissioning of the Hyderabad-based Sanghi Group’s cement unit at Abdasa in Kutch district of the state nearly a decade ago.

The Braj Binani Group is setting up the first project comprising two units at two different locations. The two units will have a total combined installed capacity of 2.5 million tonnes. The locations are still to be finalized, company officials said.

Mysore Cements Ltd. (MCL), the Indian arm of German construction materials major the Euro 11 billion HeidelbergCement, will set up the second project, company officials said.

Initially, Mysore Cements had planned a 1 million tonne capacity plant but now it has decided to double the capacity to 2 million tonnes of cement per year.

The project will come up at Rohisa Vadhera Balana village, about seven kilometres from Jaffarabad town in Amreli district in the Saurashtra region of Gujarat. The project is awaiting environment clearance, company officials said.

The cost of the project was, however, not made available.

In May this year, the Binani Group had said in presentations made to analysts that it is planning a cement project in Gujarat. The location of the project was not announced then.

Company officials, however, said Thursday the Binani Group will set up a clinker-cum-cement grinding unit near a port in the Saurashtra region. While part of the unit’s production in clinker form will be shipped to Dubai for grinding, the rest will be ground at the unit to make cement for the domestic market.

For its second unit, the Binani Group is thinking of a location in South Gujarat.

The total project comprising both the units is estimated to cost Rs 8 billion. This will include capital expenditure on a captive jetty, company officials said.

Both the units will start operations by 2010, officials of the two companies said.

The Binani Group aims to achieve a cement manufacturing capacity of about 10 million tonnes by the end of 2009, up from the current level of 5.3 million tonnes a year.

Heidelberg had acquired Mysore Cements, an S.K. Birla Group company, in 2006. After the acquisition, MCL became a subsidiary of Cementrum I.B.V., a Dutch company, which is wholly owned by HeidelbergCement.

Originally, the Jaffarabad project was supposed to be set up by Indo Rama Cement Ltd. a 50:50 joint venture between the Lohia group’s Indo Rama Limited and HeidelbergCement.

Now Heidelberg has acquired and merged the unlisted Indorama Cement Limited as well as its Indian unit - HeidelbergCement India - with Mysore Cements in a move to consolidate its cement business in India.

This development has also brought into MCL’s fold Indo Rama Cement’s existing one million tonne plant located at Pen in Raigad district of the western Indian state of Maharashtra. MCL’s own existing cement plants are located in the central Indian state of Madhya Pradesh, the north Indian state of Uttar Pradesh and the south Indian state of Karnataka.

The two new projects, on completion, will raise the total cement manufacturing capacity of Gujarat to around 21.5 million tonnes.

Currently, cement production in the state is about 17.14 million tonnes accounting for a 10.28 percent share of the total national output. The current consumption of cement in the state is around 15.22 million tonnes.

Among the major Indian cement companies having their presence in the state are Gujarat Ambuja Cement with a capacity of 4.5 million tonnes, followed by the Aditya Birla group’s Ultratech Cement with a production capacity of 5.3 million tonnes, Sanghi Cements with a capacity of 2.6 million tonnes, the Mumbai-based Mehta group’s Saurashtra and Gujarat Siddhee Cements with a combined capacity of 2.36 million tonnes and Shree Digvijay Cement with a capacity of 1.08 million tonnes.

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