The Hindu Business Line : Ambuja Cement Eastern deregistered from BIFR

AMBUJA Cement Eastern Ltd (ACEL), which was formerly Modi Cement Ltd, has turned around. It has been deregistered from the BIFR (Board for Industrial and Financial Reconstruction) and is now planning fresh clinker and grinding capacities.

Addressing a press conference, Mr Harshavardhan Neotia, Managing Director of ACEL , said a new grinding unit had been planned at Farakka in West Bengal. The unit's capacity will be one million tonne per annum and will cost Rs 115 crore.

The company is also preparing a clinker capacity expansion plan at its Bhatapara (Chhattisgarh) unit. The details of the plan are likely to be ready within the next two-three months.

On ACEL, Mr Neotia said that for the year-ended June 30, the company registered a turnover of Rs 471.21 crore against Rs 422.65 crore the previous year. The net profit in 2004-05 was Rs 45.07 crore.

Gujarat Ambuja acquired Modi Cement from BIFR in 1998 after paying Rs 166 crore. Subsequently it invested Rs 60 crore in machinery modernisation. Another Rs 130 crore was invested in setting up a one-million tonne grinding unit at Sankrail in Howrah, West Bengal.

In the last seven years, Mr Neotia said clinker production registered a CAGR growth of 10.19 per cent and cement production 16.18 per cent, which is double the industry average.

"From a net loss of Rs 92 crore in 1998, ACEL registered a profit-before-tax of Rs 95.5 crore in 2004-05. The book value per share increased to Rs 13.3 from Rs 1.6. The ROCE is 25 per cent and the EBIDTA margin 28 per cent," he said.

More than 95 per cent of ACEL shares are held by Ambuja Cement India Ltd (ACIL), which is currently a 67:33 joint venture between global cement major, Holcim, and Gujarat Ambuja Cement Ltd. Apart from ACEL , ACIL holds majority stake in ACC Ltd.

ACEL has increased the share of its blended cement production to 91 per cent and Mr Neotia said soon it will be raised to 100 per cent. At Bhatapara, the company set up a 15 MW thermal power plant in May.

About the proposed Farakka unit, he said the project would be funded mostly from internal accruals but will have a small debt component. The plant is likely to be ready within one year. The unit will using the fly ash generated by the nearby NTPC power plant.

He ruled out a merger of ACEL with Gujarat Ambuja Cement saying that there is no such proposal at the moment.

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