Ambuja Cements Limited, part of the Holcim Group, has sought more time from the state government for executing its proposed greenfield cement plant at Nadikudi in Guntur district.
The company had got all the necessary approvals, including limestone mining leases, way back in 2008 for the project, which was originally proposed with a 2-million tonne capacity along with a grinding unit at Kakinada with an investment of Rs 600 crore.
However, it remained silent on project implementation till the state ministry for mines recently reviewed the status of cement projects that were given limestone mining leases based on the investment.
Ajay Kapur, business head - South and West of Ambuja Cements Limited, had written a letter to the chief secretary late last month seeking time till December 2013 to execute the project, stating that the company now wants to increase the project size to 5.75-million tonne capacity, according to officials.
An industry analyst said project delays in the cement sector in AP were understandable considering the surplus capacities that exist in the state. AP has over 40 million tonne production capacity, including the ongoing expansion.
South, which has the largest installed capacity (90 million tonne in FY 2010) in the cement sector compared with any other region in the country, registered the lowest capacity utilisation of 76 per cent last year while the consumption within the region stood at 57 per cent, according to Ernst & Young.