In a bid to retain its retail rural market share and enhance focus on value-added products, ACC plans to open a series of cement brick-making units in partnership with dealers and social organisations.

While ACC will provide the expertise and technical support, the joint venture partner, which gets to retain 80 per cent of the profit, would own and operate the units. Each plant calls for an investment of ₹2-2.6 crore.

The brick units have to compulsorily source cement from ACC which has opened 19 brick units largely in the northern and eastern part of India. It plans to set up another 26 in seven months.

Speaking to BusinessLine , Danish Rashid, Head-Business Development, said the brick units have opened the doors to new sales channel in a few places with each unit consuming about 100 tonnes of cement a month.

On an average, a cement brick unit will be able to cater to one district though there are exceptions. With a margin of ₹1 per brick and an average production of 55 lakh per year, the payback period is four years though there are units which sell about 2.6 crore bricks a year, said Rashid.

Tie-ups

Some of the red brick manufacturers have also joined hands with ACC to set up cement brick units. Recalling how difficult it was to induce red brick makers, Rashid said a businessman with three red brick kilns at Itawa in Rajasthan agreed to close down one unit for setting up a new cement brick plant after much persuasion.

“We convinced him by explaining on how the soil gets degraded when the red sand is removed for making bricks. Finally, he gave in on the backing of ACC in his new venture,” he said.

Rashid said six red brick makers have shut their units and joined hands with ACC.

Consumer benefits

Besides the quality, cement bricks absorb less water and come in a consistent size, cutting down on the number of bricks required.

For instance, Rashid said, to build a 40x60 sq ft room one requires 567 cement bricks compared with 798 red bricks. The use of mortar is also lower as the top layer of the cement brick is well laid.

This will result in huge cost-savings, though consumers have to pay ₹1 more for cement bricks, he added.

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