Gujarat Ambuja Cements (GACL) plans to enter infrastructure business through building of roads, dams, bridges, jetties and ports. Shareholders at the forthcoming annual general meeting on October 5 will vote to enable Ambuja to take up such projects.
Ambuja, one of India's most successful cement companies, wants to set up these facilities through build, own, transfer (BOT), build, own, lease and transfer (BOLT) and build, own, operate and transfer (BOOT).
Having a cement capacity of over five million tonne per annum, the move will also enable captive consumption of cement. Gujarat Ambuja has also acquired Modi Cements with a capacity of 1.8 million tonne recently.
Adding to this, the construction industry is expected to take a big leap since the government has proposed huge investments in the infrastructure segment.
The proposed abolition of the Urban Land Ceiling Act and the thrust on housing sector is also expected to bring about a boom in the industry. Larsen & Toubro (L&T), its arch-rival in cement, is already targeting infrastructure in a big way.
The Indian cement industry has also been burdened with excess supply due to commissioning of new capacities from L&T, DLF, Binani Cement and Prism Cement. Since GACL has the facilities for sea transport, the cost of transportation for port-based projects will be quite less compared to its competitors.
The AGM will also vote on proposals to approve share buyback and employee stock option scheme after the Companies Act is amended.
GACL has acquired a small company in Sri Lanka called Midigama Cement Pvt Ltd through its Mauritius-based subsidiary Cement Ambuja International (CAIL). GACL spokesperson said it plans to set up a facility with a capacity of 0.5 million tonne and later expand the capacity when required.
Setting up this subsidiary will also help the comapany develop international markets for exports.
The Sri Lankan subsidiary will also sell cement under the company's brand name - Ambuja Cement.
In the last year, GACL had exports of 5.40 lakh tonne as against 4.77 lakh tonne in the year before that. In value terms, the exports were to the tune of Rs 83.95 crore constituting around 7.5 per cent of its total sales to become the largest cement exporter in India.
