The Hindu Business Line : BK Group plans cement unit in Assam

The BK Group, one of the premier business families of the North East, has finalised a plan to set up a greenfield cement project at Cachar in Assam, entailing an investment of about Rs 414 crore.

The proposed plant, with an annual capacity of 1.5 million tonnes (mt) is likely to be the largest cement manufacturing unit in this part of the country.

A new company - Calcom Cement India Ltd (Calcom) - has been incorporated by the group to undertake the project, which is all set to start commercial production by March 2007.

Besides the BK Group of companies — Vinay Cements Ltd and RCL Cements Ltd — which jointly hold about 90 per cent equity stake in Calcom, the Assam Industrial Development Corporation will have 10 per cent stake. IL&FS has been roped in as the investment banker. The company is reported to have tied-up debt portion of Rs 268 crore, while the project is being financed at a debt-equity ratio of 1:1.8.

The Chairman of the Group, Mr Binod Kumar Bawri, told Business Line that the outfit has been in cement manufacturing business in the North East since 1987. It set up its first unit at Cachar in the same year. The second unit was set up at the same area in 1990. These two units are at present operating with a combined annual capacity of about 0.3 mt. The group's Vinay Cement was considered the largest local cement brand, with a market-share of eight per cent in the region.

Mr Bawari said modern technology was being introduced based on the dry process. Moreover, the company enjoys the advantage of owning captive mines and would be a logistic-driven plant once it starts operation in 2007.

Meanwhile, the group is in the process of ordering the required machinery. In the first year of full commercial production, he said, the company is expecting 70 per cent capacity utilisation, and the plant is projected to generate a turnover of about Rs 395 crore in the first year of production.