ACC closes Gagal plant to prevent inventory buildup

The country's largest cement maker, ACC Ltd, today said it has temporarily shut down its manufacturing facility at Gagal in Himachal Pradesh for 15 days starting yesterday to prevent inventory buildup of clinker.     

"The poor demand scenario coupled with duty-free and CENVAT-free imports has resulted in the clinker stock at Gagal plant of the company increasing from August onwards to reach a high level in December," ACC Ltd said in a filing to the Bombay Stock Exchange.     

The situation has necessitated a halt in production of clinker—a core element in manufacturing of cement—in its kilns at Gagal for 15 days, starting from December 16, it added.     

The company is keenly watching the impact on cement demand due to the recent positive initiatives taken by the government to improve liquidity and catalyse construction activities," the statement said.     

ACC hoped the government would take further steps to stimulate cement demand in the country by initiating specific measures such as imposition of countervailing duty (CVD) and Special Additional Duty (SAD) on cement imports from Pakistan.     

"The government could also consider rationalising the cement excise duty structure, as well as providing abatement of at least 40% as is the case with many other commodities," the company said.