ACC pens Rs 400 crore expansion blueprint

The Associated Cement Companies (ACC) has planned a Rs 400 crore capex in the current financial year.

Of this, ACC will invest around Rs 250 crore for its ongoing expansion at its Chaibasa unit in Jharkhand, while the balance will be utilised for modernisation of other plants and debottlenecking.

Nash Italia, president, finance, ACC, told Business Standard, "Although the expansion at Chaibasa has already begun in the last financial year, the bulk of the investment for the project will happen in this year."

The company has not yet finalised the mode of financing the capex. However, the investment will be made primarily from internal accruals, Italia added.

The expansion at Chaibasa entails an investment of Rs 285 crore. The project includes increasing the production capacity and setting up of a 15 MW captive power plant at the unit. The company had invested around Rs 40 crore in the Chaibasa project in the financial year ended March 31, 2004.

The company is also looking at making investments to reduce its power and fuel costs. At present 85 per cent of ACC's power requirement is met by its captive power plants.

"The power plant at Chaibasa will take care of almost all our power requirements."

Only ACC's unit at Gagal would not be covered by the company's captive power plants.

ACC has also earmarked a certain amount for the modernisation of its subsidiary, Bargarh Cement. "We are looking at increasing Bargarh's production capacity to over a million tonne per annum, by the end of the current financial year." Bargarh existing production capacity is 8.5 lakh tonne per annum.

Meanwhile, cement sector analysts said, "ACC's capacity could be enhanced up to 10 per cent through debottlenecking." The company's current capacity is about 17.5 million tonne per annum.