The Hindu Business Line : Nalco eyes cement manufacturing

New Delhi, July 23 National Aluminium Company Ltd (Nalco), the country’s second largest aluminium producer, is planning to get into cement manufacturing business and is looking at a tie-up with established domestic or global cement players to float a medium- to large-size cement plant.

The State-owned company is currently scouting for joint venture partners to set up the cement plant and plans to use fly ash generated at its captive power plant at Angul in Orissa and convert it into saleable products, industry sources said.

The company is looking at manufacturing Pozzolana Portland Cement (PPC) and is open to marketing of cement for both domestic and export market using the fly ash from the plant. The company is likely to take a firm view on the cement manufacturing plan and utilisation model for fly ash once it ties-up the joint venture.

Nalco currently has a captive power capacity of 960 MW. Two more power plants with a capacity of 120 MW are slated for commissioning in 2008. The company generates about 6,000 million tonnes of ash per day and 4,800 million tonnes of fly ash daily from these plants.

“The Indian cement industry is passing through one of its fastest growing phase. Nalco’s decision to enter this sector will help it to have an additional source for revenue,” an analyst tracking the sector said.

Betting on housing sector

Driven by a booming housing sector and increased activity in infrastructure development of national highways, the domestic cement sector has been ramping up production capacity, with capacity utilisation crossing the 100 per cent mark for the first time in January 2007.

According to the Cement Manufacturers Association (CMA), the average monthly capacity utilisation during fiscal 2006-07 was 94 per cent. Cement despatches for the last fiscal was at an all-time high of 155 million tonnes, up from 142 million tonnes during the previous fiscal.

Globally, India is the second largest producer of cement, with production growth rate of 9.1 per cent during 2006-07 over the previous fiscal’s total production of 147.8 million tonnes. Of this, 9.3 million tonnes of cement were exported.

The Indian cement industry comprises 130 large cement plants and 365 mini-cement plants, with installed capacities of 165 million tonnes per annum. Despite the growth of the Indian cement industry, India’s per capita production of 115 kg per year lags the world average of over 250 kg and China’s production of more than 450 kg per person, a pointer to the growth potential in sector.

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