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Straddling the Indian market
By P.N.V. Nair
Gujarat Ambuja
Straddling the Indian market
At a time when cement majors in the country are putting their capacities on the block Gujarat Ambuja Cement is aggressively expanding its capacities. Undeterred by the slow growth in the sector, the company has invested over Rs 2,000 crore in the last three years. GACL and its group companies would be having a total capacity exceeding 12.5 million tonnes. Its 14.4 per cent stake in ACC will, for all practical purposes, increase its stake by another 15 million tonnes. With over 27 million tonnes under its control, GACL will be one of the most formidable players in the sub-continent.
During the last three years:
· GACL acquired the 1.4 million tonne Ambuja Cement Rajasthan Ltd (ACRL), earlier known as DLF Cement Ltd, for Rs 161 crore (GACL owns 49 per cent equity in this company).
· It enhanced the clinker and grinding capacity by 1 million tonne at Ambujanagar at a cost of Rs 128 crore.
· It set up a 0.5 million tonne grinding unit at Bhatinda in Punjab at a cost of Rs 64 crore.
· It is in the process of setting up a 2 million tonne greenfield cement plant at Chandrapur in Maharashtra at an estimated cost of Rs 675 crore. This plant along with a captive thermal power plant of 40 mw is expected to be commissioned by December 2001.
· It is also setting up a 1 million tonne grinding unit at Sankrail, near Kolkata, together with a 10 mw captive power unit at Bhatapara by its subsidiary, Ambuja Cement Eastern Ltd, at a cost of Rs 165 crore.
· In addition to the above, its subsidiary company, Ambuja Cement India Ltd, has invested Rs 928 crore in purchasing 14.4 per cent equity shares of ACC Ltd. When its new plant at Wadi with a capacity of 2.6 million tonnes is commissioned ACC will have an installed capacity of 15.3 million tonnes per annum.
It has been a little over a year since GACL has assumed management control of ACRL and the company was able to produce highest quality 53 Grade cement which has been very well received in the northern market. To raise long-term fund requirements, the company issued foreign currency convertible bonds, shares and convertible warrants for an aggregate sum of Rs 821 crore.
Besides expanding capacities the company is also focusing on cutting costs. The bulk transportation by the sea-route has helped the company in remaining cost competitive both in the western region as well as in the south. Its investments in Muldwarka port, near Kodinar in Gujarat, have really yielded them good results. It has not only been able to ship bulk cargo outward but also facilitate bulk imports of coal and furnace oil. The company owns five cement transport ships. Its terminals at Panvel and Surat have been expanded and are working efficiently.
GACL's wholly owned subsidiary company incorporated in Sri Lanka namely, Ceylon Ambuja Cements (Private) Ltd, has commissioned its bulk cement terminal in September 2000 at Galle in southern Sri Lanka. The terminal has the capacity to handle 5 lakh tonnes of bulk cement annually. The company commenced export of bulk cement to Ceylon Ambuja and discontinued bagged cement.
With post-monsoon demand picking up, Gujarat Ambuja is strategically poised to reap the benefits from the reconstruction of Gujarat, the Golden Quadrilateral and the Prime Minister's Gram Sadak Yojana. Moreover, its stake in ACC, which has presence across the country, will enable the company to synergise certain operations over the long run, and in territories where both have a significant presence it will be able to command a higher pricing.
At a time when cement majors in the country are putting their capacities on the block Gujarat Ambuja Cement is aggressively expanding its capacities. Undeterred by the slow growth in the sector, the company has invested over Rs 2,000 crore in the last three years. GACL and its group companies would be having a total capacity exceeding 12.5 million tonnes. Its 14.4 per cent stake in ACC will, for all practical purposes, increase its stake by another 15 million tonnes. With over 27 million tonnes under its control, GACL will be one of the most formidable players in the sub-continent.
During the last three years:
· GACL acquired the 1.4 million tonne Ambuja Cement Rajasthan Ltd (ACRL), earlier known as DLF Cement Ltd, for Rs 161 crore (GACL owns 49 per cent equity in this company).
· It enhanced the clinker and grinding capacity by 1 million tonne at Ambujanagar at a cost of Rs 128 crore.
· It set up a 0.5 million tonne grinding unit at Bhatinda in Punjab at a cost of Rs 64 crore.
· It is in the process of setting up a 2 million tonne greenfield cement plant at Chandrapur in Maharashtra at an estimated cost of Rs 675 crore. This plant along with a captive thermal power plant of 40 mw is expected to be commissioned by December 2001.
· It is also setting up a 1 million tonne grinding unit at Sankrail, near Kolkata, together with a 10 mw captive power unit at Bhatapara by its subsidiary, Ambuja Cement Eastern Ltd, at a cost of Rs 165 crore.
· In addition to the above, its subsidiary company, Ambuja Cement India Ltd, has invested Rs 928 crore in purchasing 14.4 per cent equity shares of ACC Ltd. When its new plant at Wadi with a capacity of 2.6 million tonnes is commissioned ACC will have an installed capacity of 15.3 million tonnes per annum.
It has been a little over a year since GACL has assumed management control of ACRL and the company was able to produce highest quality 53 Grade cement which has been very well received in the northern market. To raise long-term fund requirements, the company issued foreign currency convertible bonds, shares and convertible warrants for an aggregate sum of Rs 821 crore.
Besides expanding capacities the company is also focusing on cutting costs. The bulk transportation by the sea-route has helped the company in remaining cost competitive both in the western region as well as in the south. Its investments in Muldwarka port, near Kodinar in Gujarat, have really yielded them good results. It has not only been able to ship bulk cargo outward but also facilitate bulk imports of coal and furnace oil. The company owns five cement transport ships. Its terminals at Panvel and Surat have been expanded and are working efficiently.
GACL's wholly owned subsidiary company incorporated in Sri Lanka namely, Ceylon Ambuja Cements (Private) Ltd, has commissioned its bulk cement terminal in September 2000 at Galle in southern Sri Lanka. The terminal has the capacity to handle 5 lakh tonnes of bulk cement annually. The company commenced export of bulk cement to Ceylon Ambuja and discontinued bagged cement.
With post-monsoon demand picking up, Gujarat Ambuja is strategically poised to reap the benefits from the reconstruction of Gujarat, the Golden Quadrilateral and the Prime Minister's Gram Sadak Yojana. Moreover, its stake in ACC, which has presence across the country, will enable the company to synergise certain operations over the long run, and in territories where both have a significant presence it will be able to command a higher pricing.
(16/9/01)
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