The new plants, which are sinking Rs 9,000 crore as investment, will add 35 million tonnes (mt) of annual capacity, while the brown field projects will add another 28 mt. That will take the total capacity in the state to 87.5 mt a year, a sharp rise from the current 24.5 mt.
In 2006-07, the total cement production in the country was 138.27 mt, which rose to 198 mt in 2007-08.
At present, there are 132 major cement plants in the country with a combined installed capacity of 166.73 mt. Of these, 23 are in Andhra.
According to state government officials, the flame that is attracting cement units to Andhra is enormous deposits of limestone, the primary raw material, at strategic locations and ready markets in the neighbouring states of Tamil Nadu and Karnataka.
As per the estimates of the Indian Bureau of Mines, AP has 35,000 mt of limestone deposits whereas the neighbouring Tamil Nadu has just 1100 mt. Next to AP, Gujarat has the highest limestone reserves of 20,000 mt followed by Rajasthan (19,000 mt) and Meghalaya (16,000 mt).
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The proposed cement plants in AP are Eswar cements, Raghuram Cements, ACC Cements, Dalmia Cements, Jindal penna cements, Trishul cements, Madras cements, Prism Cements, Grasim Cements, Sri Jayajyothi Cements, Sanghi Cements, Jaya Prakash Associates and Penna Cements.
Among these, six companies have already secured mining leases, while the issue of mining leases to five other companies is under process. No paper work started with regard to Trishul Cement, which is yet to submit detailed proposals.
Grasim Cements proposes to set up a 3.5 mt cement plant at Petnikota in Kurnool district at a cost of Rs 1,500 crore. ACC, which already has a cement plant at mancherial in Adilabad district, is planning to set up a 2 to 4 mt unit at Dhanvada in Kurnool district at a cost of Rs 1,200 crore.
Jindal is also setting up a 3 mt cement plant at Garivemula in Kurnool district at a cost of Rs 900 crore.
The state government has granted four mining leases spread over an extent of 1,956 hectares to Madras Cements which setting up a 2 mt capacity cement plant at a cost of Rs 900 crore at Kolimigundla in Kurnool district. The company has invested Rs 30 crore towards purchase of patta lands and civil works are expected to be completed by the end of this year.
According to AP director of mines and geology, V D Raja Gopal, mining lease over an extent of 825 hectares has been granted to Raghuram Cements which is setting up a 2.5 mt cement plant Nallingayapalli in Kadapa district.
The Rs 510-crore project is expected commence commercial production by December 2009. Dalmia Cements 4 mt plant in the same Kurnool district is under construction and expected to go on stream by 2009.
Penna Cements, which secured two mining leases spread over an extent of 421 hectares, is establishing a cement unit at Boireddypally in Anantapur district.
With regard to Prism Cements, the state government has agreed to extend the time of execution till next year. It is setting up a 2 mt plant at Kothapadu and Kalvartha in Kurnool district at a cost of Rs 500 crore. Sri Jayajothi Cements claimed that it has already ordered for machinery supply for its proposed Rs 586 crore, 3.2 mt capacity plant at Yankana village in Kurnool district.