Ashapura Minechem in JV with Chinese firm for Kutch plant

Ashapura Minechem's alumina plant in Kutch is expected to start commercial operations by 2008.

The company has inked a joint venture (JV) agreement with China's Sichuan Aostaar Aluminium Company (SAAC) for the one million tonne plant. As per the deal, SAAC will procure 75 per cent of the alumina produced at the Kutch plant for 30 years.

Ashapura Minechem expects 12 per cent returns on investments from 2008 onwards.

"Forty per cent of the Rs 1500-crore project cost would be funded through equity while 60 per cent would be through long term borrowings. 50 per cent of the equity component will be from Indian partners and the rest from the Chinese partners," Chetan Shah, managing director, Ashapura Minichem, said today.

SAAC will invest around $ 500 in the plant, apart from providing technology assistance. "We will source raw material for our three lakh tonne aluminium plant in China from this Kutch plant. We have committed to buy 75 per cent of the alumina produced in the plant for the next 30 years," said Shuo Shi, senior advisor, SAAC.

Ashapura Minichem has reported a turnover of Rs 360 crore in the last financial year and eyes to close the current financial with a turnover in excess of Rs 500 crore.

"With this project our turn over would exceed Rs 2000 crore in the next five years," said Shah.

The company has recently acquired Bombay Mines Ltd for its mining operations in Kutch and Jamnagar. It also plans to enhance its mining operations in Orissa and Kerala.

The company also plans to manufacture value added products in Gujarat like Geosynthetic Clay Liners (GCL), an engineered composite liner system to protect the environment.

The company with manufacturing facilities in Bhuj, Bhavnagar and Jamnagar in Gujarat is planning to invest Rs 40 crore to implement these projects.

The Group would be proceeding with the expansion of bleaching clay and catalyst clay project in Bhuj at a proposed investment of 20 crores, geo-synthetic clay liners for environmental and civil engineering application project at a projected investment of Rs 10 crores and organoclay project for chemical application for 10 crore.

All these products will be manufactured by Ashapura Volclay Ltd, a joint venture company of Ashapura Group and AMCOL International.

The company is the sixth largest Bentonite producer in the world with mining reserves of more than 25 million tonnes. It exports to over 30 countries in Middle East, Latin America, Europe, Egypt, Japan and South East Asia and Australia.

The company also has interests in other non-metallic minerals such as Bauxite, Barytes, Attapulgite, Mica and other drilling muds for over three decades, besides Feldspar and China Clay. The company aims to emerge as one of the largest producer of Bauxite in the world.