The Hindu Business Line : Cement industry counts on efficiency to boost output

With major capacity expansion still some time away, the cement industry is counting on plant de-bottlenecking and efficiency gains to enhance production in the short run.

ACC has been able to report 11 per cent increase in production to 1.70 million tonnes (mt) in June against 1.53 mt in the corresponding period last year. Between January and June 2007, ACC’s production rose 5.47 per cent to 10.21 mt against 9.68 mt in the corresponding period last year.

And, for the period, despatches jumped 9.67 per cent to 1.70 mt against 1.55 mt last June. For the half year as a whole, despatches rose by 5.48 per cent at 10.20 mt against 9.67 mt last year.

Another cement major Ambuja Cements Ltd has reported a flat growth in production and despatches. Its production and despatches this year were 1.41 mt and 1.38 mt, almost identical to last year figures. Between January and June, production was at 8.70 mt (8.60 mt) and despatches were 8.71 mt (8.57 mt).

At the Aditya Birla Group’s flagship cement company Grasim, production in June at 2.57 mt rose 6.20 per cent over the corresponding month last year. In the first quarter of the current fiscal, it grew by a little over four per cent compared to last year.

“Though all our plants were running to full capacity we managed to push up production by de-bottlenecking,” said an official of Aditya Birla group.

But ACC could see some addition to production with one of its units going onstream. “The trial run for the Lakheri plant in Rajasthan was carried out successfully which has added about one mt to our capacity.”

ACC Ltd will spend about Rs 4,000 crore over the next three years to add roughly eight mt to take its cement capacity to 27.5 mt from 19.91 mt. The investments include Rs 1,487 crore for increasing the clinkering capacity at the Wadi plant, additional grinding facility and a captive power plant of 50 MW in Karnataka. In addition, the grinding capacity of its plants at Madukkarai (Tamil Nadu) and Bargarh (Orissa) will be augmented by next year.

Other projects

ACC projects that are slated for completion this year are: a grinding unit at Tikaria (Uttar Pradesh) and Kymore (Madhya Pradesh). In 2008, the company will complete the augmentation of cement grinding capacity at Madukkarai by 0.22 mt and the capacity of the Bargarh plant will be scaled up to 2.14 mt. These expansions will add more than seven mt capacity by 2009.

Aditya Birla group is setting up a greenfield cement plant at Kotputli in Rajasthan (with a split grinding unit at Panipat in Haryana) of a total capacity of four mt per annum; and a new plant at Shambhupura in Rajasthan (with a split grinding unit) of a total capacity of four mt per annum. The company would also be setting up thermal power plants at both these locations.

The company will invest Rs 2,495 crore in the new projects. The Shambhupura plant is expected to go on stream by the end of the financial year 2008, while the Kotputli plant is expected to be commissioned in the first quarter of the financial year 2009.