Jaypee expansion to cost Rs 3,000 cr

Capacity to be doubled to 15 million tonne.

The New Delhi-based Jaypee group has drawn up an investment plan of Rs 3,000 crore to raise its cement capacity to 15 million tonne per annum (tpa) by 2007 from the current 7,000 tpa.

The investment will come from the recently-concluded foreign currency convertible bond (FCCB) issue of $200 million which, the company hopes, will deliver a 100 per cent growth in revenues to Rs 7,000 crore.

"Post expansion, we will be the third-largest cement player in the country after AV Birla group and Holcim," said Manoj Gaur, managing director, Jaypee Associates.

The group is also modernising UP cement, which it recently acquired for Rs 459 crore from the Uttar Pradesh government. Jaypee will spend Rs 350 crore on modernising the outfit.

The group will also set up a thermal power plant there. "This is the only cement plant that can exist in Uttar Pradesh because of limited limestone availability. Uttar Pradesh is the second-largest consumer after Maharashtra," said Gaur.

Meanwhile chairman Jaiprakash Gaur has given up the chairmanship of the group's hydro power and hotels businesses.

"He is in good health, but does not want to be a prisoner of protocol. However, he remains the chairman of the parent company and continues to be actively involved in power and cement businesses," said Manoj Gaur.

The group is among those pre-qualified by Steel Authority of India (SAIL) for a cement joint venture in Satna, Madhya Pradesh. A decision on the issue is likely by March this year.

"If this does not work out, we will explore a plant on our own in Madhya Pradesh," said Gaur. The Jaypee group is also eyeing an alternative fuel project in Chandigarh for the group's cement plant in Himachal Pradesh.