Financial Daily from THE HINDU group of publications
Friday, Jul 22, 2005
Industry & Economy - Cement
Cement cos keen on tie-up with SAIL EOIs for plants at Bhilai, Bokaro
Kolkata , July 21
LEADING cement companies such as Jaypee Cement, Shree Cement, Birla Corporation and the State-owned Cement Corporation are keen on joining hands with Steel Authority of India Ltd (SAIL) to set up joint venture cement plants at Bhilai and Bokaro.
Sources in SAIL said that all these cement companies had responded to their advertisement seeking expression of interest (EOI) for setting up cement plants adjoining to those steel units.
Though the size of the plants are yet to be finalised, initial estimates suggest that each would be of one million tonne (mt) per annum capacity, which may be expanded to two mt per annum. The cost of each would be approximately Rs 350-500 crore.
Sources said that for Bhilai, there are three interested parties the Rs 2,730-crore Jaiprakash Associates (formerly known as Jaypee Cement), the Rs 1,342.67-crore Birla Corporation, belonging to the Kolkata-based MP Birla Group, and Shree Cement of Mr H.M. Bangur.
For the proposed cement plant in Bokaro, there are two suitors. They are Shree Cement, whose existing facilities are located in Rajasthan, and Cement Corporation of India Ltd, the public sector company, which runs 11 plants in several locations.
It was also learnt that the SAIL management would soon seek detailed proposals from these companies. Thereafter, the reports would be evaluated and subsequently a final decision would be taken.
"It is too early to say anything on this matter. These are initial expressions of interest. It only shows that these cement companies are eager to set up units in those two regions," sources said.
Though SAIL had divested all its interests in cement long time, off late, the top management is contemplating setting up cement plants adjoining its Bhilai and Bokaro integrated steel units as it would take care of the slag generated by it.
Both these units are facing a serious problem in slag storage. Moreover, slag is facing a stiff competition from flyash.
Cement companies prefer to use flyash over slag as it is cheaper.
The Union Government is also promoting usage of flyash through its national highway construction policies.
"In such a scenario, we have no other option but to join hands with cement companies, whereby we might provide the land and the cement company would bring in clinker, mix it with slag and produce cement.
"The purpose is to get rid of the slag in a positive manner," said sources in Bokaro Steel Plant.
Prior to the EOI advertisement, Bokaro Steel Plant had detailed talks with Cement Corporation on the subject. "It is possible that Cement Corporation might be selected for the Bokaro cement plant," sources said.
Interestingly, SAIL's other two units at Durgapur and Rourkela are not facing a similar problem because cement plants located in those two regions are using their slag.
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