ACC set to spin off concrete business

ACC, the country's largest cement maker, is setting up a wholly owned subsidiary to scale up its ready mix concrete (RMC) business under a new chief executive officer (CEO).

The roadmap for the business along with the appointment of the CEO will be in place within two-three months. The company will transfer its RMC business to the new subsidiary "� ACC Concrete.

"RMC business has a huge potential in the country. It accounts for only 5-6 per cent of the cement industry's total sales in India compared with 60 per cent in developed markets," said Sumit Banerjee, the newly-appointed managing director of ACC.

According to the report of the working group on cement industry for the eleventh year plan (2007-12), the RMC sector had failed to keep pace with the growth in cement industry mainly because of the age-old practice of site mixing.

RMC refers to concrete that is specifically manufactured for delivery to the customer's construction site in a freshly mixed and unhardened state. Concrete itself is a mixture of the portland cement, water and aggregates comprising sand and gravel. It can be custom-made to suit different applications.

At present, ACC has over 16 RMC plants in the country and most of them are located in Mumbai, Bangalore, Kolkata, Delhi, Chennai and Goa. It now plans to expand the RMC business in tier-I and tier-II cities.

ACC's RMC business picked up momentum last year, when sales volume and turnover grew by 18 per cent and 36 per cent, respectively. The company will pump in around Rs 4,000 crore in the next three years to push its total cement production capacity to 27.5 million tonnes annually. This will be an increase of over 38 per cent compared with the company's current capacity of 19.9 million tonnes.