Damodar Cement to merge with ACC

Capacity to go up to 6.75 lakh tonne, boost to presence in eastern region

Cement major, ACC, is planning to expand the capacity of its wholly owned subsidiary Damodar Cement and Slag Ltd (DSCL) at Purulia in West Bengal as a part of its strategy to increase presence in the eastern region.

This would be ACC's first expansion of cement capacity in the state in recent years apart from ready mix concrete (RMC) plant. The company was also planning to merge DSCL with itself along with Bargah Cement Ltd, the Orissa based subsidiary of ACC. Barga Cement earlier used to be known as Idcol Cement.

In a communiqué to the shareholders recently, the chairman of ACC, Tarun Das said, "We believe the merger of DSCL with ACC will serve to usher in better operating efficiencies, productivity and economies of scale. This will reinforce our presence in eastern India."

Sources in ACC informed that the company had discussed the issue of increasing the production capacity at DSCL in the board meeting of the subsidiary recently. DSCL currently has a capacity of 5.25 lakh tonne, which was entirely sold in the eastern region. ACC was likely to invest around Rs 20-25 crore for the expansion of the grinding capacity in DSCL after the merger of the subsidiary with itself.

According to sources, the capacity will be increased by around 1.5 lakh ton in DSCL. The combined capacity after the expansion will be 6.75 lakh ton. "The entire new expansion will be fly ash based. The DSCL plant is currently using flakes from the steel companies like Tata Metaliks, as raw material. Now it will use fly ash," said sources.

Incidentally, ACC was expanding the capacity of it's Chaibasa plant in Jharkhand at an investment of Rs 300 crore. The expansion of Chaibasa plant was likely to be completed by the end of September 2005.

ACC's cement capacity would cross five million tonne from the present level of 4.3 million tonne after the expansion In Chaibasa, which is likely to be expanded further after DSCL expansion.

Sources informed that the production of cement in DSCL in 2004-05 had been the highest ever at 5 lakh tonne against 4.66 lakh tonne in 2003-04. The capacity utilisation was almost 95.33 per cent. DSCL has also witnessed a three fold increase in net profit from Rs 5.19 crore in 2003-04 to Rs 16.80 crore in 2004-05. The turnover also increased from Rs 107 crore to Rs 123 crore.

Associated to strengthen

• ACC was likely to invest around Rs 20-25 crore for the expansion of the grinding capacity in DSCL after the merger of the subsidiary with itself
• The entire new expansion will be fly ash based. The DSCL plant is currently using flakes from the steel companies like Tata Metaliks, as raw material
• The company is also expanding the capacity of it's Chaibasa plant at an investment of Rs 300 crore. It is likely to be completed by the end of September 2005
• Its cement capacity will cross five million tonne from the present level of 4.3 million tonne