The Hindu Business Line : SAIL forays into cement manufacturing

Forging alliance
The new joint venture cement manufacturing plant would be set up in Bhilai.
While SAIL will hold 26 per cent stake in the joint venture, JAL will hold the remaining 74 per cent.

New Delhi March 21 Steel Authority of India Ltd (SAIL) today forayed into cement manufacturing and signed a shareholder agreement with Jaiprakash Associates Ltd (JAL) to set up a joint venture cement manufacturing plant in Bhilai.

Earlier, in June 2006, the company had announced that it would form a joint venture with JAL to set up a cement plant with an annual capacity of two million tonnes. The new joint venture would be using the slag generated at the blast furnace in Bhilai Steel Plant (BSP) and also the idle assets of Satna limestone mines.

SAIL will hold 26 per cent stake in the joint venture, while JAL will be the majority shareholder with 74 per cent shareholding. SAIL will offer one million tonnes of granulated slag annually and provide land at Bhilai and Satna on lease to the new company, and JAL will organise debt and ensure project execution within defined scope, cost and time. JAL will also be responsible for project and operations of the joint venture company, according to a press release issued by SAIL.

The approximate cost of the project would be around Rs 600 crore and is expected to be complete in 37 months, the release added. BSP currently generates around 1.5 million tonnes of slag per annum, which is disposed through medium-term contracts to cement manufacturers. The use of slag in the cement plant would vastly reduce the problem of disposal of this blast furnace waste.

Under Bhilai's ongoing expansion plan, the annual generation of blast furnace slag is likely to increase to around 2.1 million tonnes SAIL has plans to set up a similar cement-producing unit as a joint venture at its Bokaro plant. As part of its future plans, the company has also started the feasibility study for its proposed Special Economic Zone in the excess land that it possesses at its Salem Steel Plant.

"We have not yet put a formal application for the SEZ plan. After the feasibility study is over we would take decisions on other things including investment," the company Chairman, Mr S.K. Roongta, said.

Infrastructure Development

On the company's foray into the cement business, Mr Roongta said, "this is the largest joint venture that SAIL was embarking on with a partner from the private sector. Steel and cement being the prime inputs for infrastructure development of the country, we are happy about our association with the cement industry."

According to the Executive Chairman of JAL, Mr Manoj Gaur: "It is a giant stride for JAL to be a joint venture partner with a business organisation like SAIL. The project will have modern technology and shall be completed ahead of schedule."

More Stories on : Diversification | Cement | Steel | Steel Authority of India Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page