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Binani Group plans in Mauritius taking shape

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Gets nod for setting up cement grinding unit; to invest $30 m.

Mr Vinod Juneja, Managing Director, Binani (file photo).
Mr Vinod Juneja, Managing Director, Binani (file photo).

Suresh P. Iyengar

Mumbai, March 10 The Binani Group has been allotted four hectares near Port Louis by the Mauritius Port Authority for setting a 0.5 million tonnes cement grinding unit along with a captive power plant.

Mr Vinod Juneja, Managing Director, Binani Cement, said the company had asked for 10 hectares of land as it intends to expand the capacity of the planned grinding unit to 1 mt.

The company will be investing $30 million in the project to be completed within a year. The debt-equity ratio for investment into the Mauritius plant will be 1:1.

“We will be importing clinker from our plants in India, China and Dubai to tap the African markets. We have no intention of setting up a full-fledged cement factory in Africa as there is no raw material available,” said Mr Juneja.

The company has plans to increase the combined capacity of its plant in China and Dubai to 4 mtpa (million tonnes a year) from 2.5 mtpa.

In China, Binani Cement will expand its clinker capacity to 2.5 mtpa from 0.8 mtpa by June 2009 with an investment of $100 million and in Dubai it will add 1 mtpa to the existing 1.5 mtpa by next year with an investment of $75 million.

The company will make Mauritius the hub for the supply of cement to the neighbouring region, particularly to the countries of the Southern African Development Community and those of the common market for eastern and southern Africa.

The company is also in discussion with the Mauritius government to obtain incentive in the form of moratorium on rents, port charges and a long-term tax holiday, which will reduce the cost of the project.

Domestic expansion

It has tied up Rs 450 crore through a consortium of six banks including IDBI and Punjab National Bank for the cement project; the company will pump in the rest.

It acquired 25 acres required for the plant and is awaiting the mining policy of the Gujarat government to kickstart the project.

In a bid to overcome the fluctuation in the prices of coal — one of the major cost components in cement production — Binani Cement has signed a six month contract for coal supply from Indonesia. According to the deal, the company will get a discount of 5-10 per cent on the spot price prevailing on the day of shipment.

Related Stories:
Binani Cement inks pact for setting up plant in Gujarat
Binani lines up Rs 1,000-cr investment in cement, zinc

(This article was published in the Business Line print edition dated March 11, 2009)
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