Financial Daily from THE HINDU group of publications
Saturday, Jan 07, 2006
Financial Daily from THE HINDU group of publications Saturday, Jan 07, 2006 |
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Corporate
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Alliances & Joint Ventures Jaypee, Shree Cement, Birla Corpn in fray for SAIL's Bhilai venture Kohinoor Mandal
Kolkata , Jan. 6 STEEL Authority of India Ltd (SAIL) is likely to choose one of three leading cement companies — Jaypee Cement, Shree Cement and Birla Corporation — for its proposed joint venture unit at Bhilai. Sources in SAIL said that the three had submitted their initial EoI (Expression of Interest) nearly six months ago. Subsequently, the companies were asked to clarify on certain technical aspects. "Only a few days back, these clarifications have been submitted to us. We will study these reports and subsequently ask these companies to prepare the financial details," sources told Business Line. The three cement companies are likely to submit the financial details, most likely by this month-end. Thereafter, SAIL would take a final decision in the matter. Sources said that either by February-end or early March, the company would make a final selection. The size of the proposed cement plant is likely to be one million tonnes per annum and may be expanded to two million tonnes later. The initial cost of project is put at around Rs 350 crore. Jaypee Cement, now called Jaiprakash Associates, is a Rs 2,730-crore company. The other two are Kolkata-based. While Birla Corporation belongs to the M.P Birla group, Shree Cement is owned by Mr H.M. Bangur. Interest in cement: SAIL had divested its interests in cement a long time ago, but of late, the top management is seriously contemplating setting up cement plants for two of its major units at Bhilai and Bokaro to utilise the enormous amount of slag generated by these units. The cement companies were once keen to buy the slag but now are losing out to the fly-ash (generated by thermal power plants) as it was cheaper. Moreover, the Union Government is also promoting the usage of fly-ash through its National Highway construction policies. "In such a scenario, we have no other option but to join hands with a cement company. It is proposed that while we would be providing the land, the cement company would set up the factory, bring in clinker, mix it with slag and produce cement," sources said. SAIL is also contemplating setting up a similar joint venture cement plant near its Bokaro unit, and the EoI for this was advertised. Sources said two companies had responded. "We have not yet gone that far with the Bokaro project, as we have done for Bhilai. It would still take some time to complete the whole process for the Bokaro unit," sources disclosed.
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