Business Daily from THE HINDU group of publications
Thursday, Aug 17, 2006
Business Daily from THE HINDU group of publications Thursday, Aug 17, 2006 |
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Corporate
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Outlook Industry & Economy - Power Madras Cements to double captive power plant capacity N. Ramakrishnan
Chennai , Aug. 16 Madras Cements Ltd is doubling the capacity of its captive power plant at its Jayanthipuram factory in Andhra Pradesh. The first unit of the coal-based 18 MW captive power plant is expected to be commissioned by March 2007. With the company's cement manufacturing capacity expected to go up by 2 million tonnes a year at the Jayanthipuram plant, it has decided to double the capacity of the captive power plant. Thermax Ltd, which bagged the order for the first 18 MW unit at Jayanthipuram, will set up the second unit too. The total cost for the captive power plant will be Rs 112 crore. The expanded captive power capacity along with the 6 MW of power that Madras Cements is entitled to from its investment in Andhra Pradesh Gas Power Corporation Ltd will take care of the power requirement of the Jayanthipuram plant. With rising input costs and growing power requirement as its manufacturing capacity goes up, Madras Cements' strategy is to cut down on power costs to the extent possible. For this, it believes that captive power generation - either coal-based plants or wind power - is the way to reduce power cost, according to Mr A.V. Dharmakrishnan, Executive Director, Finance, Madras Cements Ltd. The company has invested in a 36 MW coal-based captive plant at its Alathiyur factory in Tamil Nadu. It also has a diesel generating set, which is not being operated now due to the high cost of liquid fuel. Madras Cements is in talks with the Tamil Nadu Electricity Board to sell about 6 MW of surplus power that it has from its captive plant at Alathiyur. The talks are focussing on the price which the electricity board will pay.
Power costs
According to Mr Dharmakrishnan, the company saves substantially on power costs at its Alathiyur plant by switching over completely to captive power; its captive power cost works out to Rs 2.29 a unit while grid power costs Rs 3.62 a unit. The Alathiyur plant, whose capacity is 3 million tonnes a year, uses 62 units of electricity for every tonne of cement produced. He said that Madras Cements would invest about Rs 50 crore in adding 8 MW of wind power this year for its plant at RR Nagar in Tamil Nadu. Wind power now accounted for 85 per cent of the power consumed at this 1.2 million tonnes a year plant and wind power would take care of its entire requirement once the added capacity went on stream. The RR Nagar plant consumed 75 units for a tonne of cement produced. In the first four months of this financial year, the company's cement despatches have increased by about 30 per cent over the same period last year. Simultaneously, the price realisation of cement has also gone up on an average by Rs 25 a bag (of 50 kg). In April-July 2006, the RR Nagar plant despatched 4.37 lakh tonnes of cement (4.08 lakh tonnes), Alathiyur plant 8.48 lakh tonnes (6.80 lakh tonnes), Jayanthipuram 4.23 lakh tonnes (2.42 lakh tonnes) and the Mathodu plant in Karnataka 76,186 tonnes (54,000 tonnes).
More Stories on : Outlook | Power | Cement
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