Financial Daily from THE HINDU group of publications
Friday, Jul 19, 2002
Lafarge to build Rs 150-cr Bengal plant in two years
KOLKATA, July 18
AFTER starting off its Indian operations with two major acquisitions, French cement major Lafarge is confident of completing its first greenfield project somewhere in West Bengal in the next two years. However, the land for this proposed plant is yet to be finalised.
According to Mr K. Swaminathan, Vice-President (Sales) of Lafarge India, the size of this project will be one million tonne per annum and the cost of setting up this unit will be around Rs 150 crore.
"As the market is growing, we will have to expand our capacity to maintain the necessary market share. For that, we will have to set up the greenfield project. We are hoping that this plant will be in its place and will produce cement within the next two years,'' Mr Swaminathan told Business Line.
He said that cement consumption in eastern India, where Lafarge is a leader with a market share of 21 per cent, is 17 tonnes per annum and it is growing at a healthy pace of 11-12 per cent per annum.
According to industry sources, the proposed unit will not have any clinkerisation facility. Instead, the clinker will be brought from another Lafarge unit. It will then be ground and mixed with fly-ash which will be available from a thermal power plant located in the State.
The proposed greenfield project of Lafarge India is a much discussed subject in the parleys of the West Bengal Government for almost two years now.
Government sources said that Lafarge India asked for a number of benefits and incentives from the State Government.
"At one point, it was difficult for us to accept some of their requests,'' sources said.
When inquired about the status of the talks with the West Bengal Government, Mr Swaminathan said that talks are still on.
"We are still negotiating with the State Government. I hope something will materialise soon,'' he said.
Currently, Lafarge India's total cement capacity is five million tonnes and clinker capacity is of three million tonnes.
It started its operations by acquiring Tata Steel's cement plants in 1999. Later, in January 200,1 it acquired the cement business of Raymond Ltd. In 2001, it sold about 3.5 million tonnes of cement.
The probable locations of Lafarge India's greenfield project are Bankura and Hooghly. In Bankura, it will have an access to the fly-ash generated by the Mejia power plant, and in Hooghly, it will be from the Bandel thermal power station.
It may be noted that two other cement majors, Gujarat Ambuja and L&T, have already set up similar cement units in West Bengal to cater to the eastern India market. While the Gujarat Ambuja plant is located at Sankrail in Howrah, the L&T unit is located in Durgapur.
Currently, Lafarge India's cement operation comprises a modern split location cement facility located at Sonadih in Chhattisgarh and Jojobera in Jharkhand and an integrated cement facility at Arasmeta in Chhattisgarh. All these units are based on dry process technology.
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