ACC to sell Andhra cement facility

Associated Cement Companies (ACC), country's second largest cement maker, has decided to sale off its Mancherial Cement Works in Andhra Pradesh. The decision, which was taken by the ACC board today, will be placed before shareholders for their approval through postal ballot.

A K Jain, executive director, said the company was forced to take the sale off decision after the unit became economically unviable.

" The unit at Adilabad district of Andhra Pradesh has been running with a production capacity of 2 lakh tonne, one lakh tonne less than the installed capacity. There is no room for expansion as the key raw material, lime stone, is in short supply in the vicinity of the plant. Above all, cement markets in Andhra Pradesh continue to be depressed, making little sense for us to continue with such a small unit."

He also said the company is in talks with some probable buyers. " We have initiated dialogues with a handful of local cement companies," he said. However, he declined to divulge further details on this.

An analyst said the north and eastern markets are stabilised, but the southern market continues to lag behind. Among the southern market, Andhra Pradesh has been most lagging, as far as cement prices are concerned.

In Andhra Pradesh, prices have not picked up even in the pick season of construction in December -January. Now the average price of a 50 kg cement bag is Rs 120 in Andhra Pradesh, comparred with Rs 150 a bag in the neighbouring states like Tamil Nadu, Karnataka and Kerala.

ACC has appointed Shirin K Bharucha, legal advisor, as the scrutiniser for the postal ballot. The scrutiniser will submit her report to the ACC chairman. and the results of the ballot will be announced on March 01.