New Delhi, Feb 22 (UNI) The State owned Steel Authority of India Limited (SAIL) signed a shareholder's agreement with Jaypee Associates Limited (JAL) late last evening to form a joint venture company called Bokaro Jaypee Cement Limited (BJCL), for setting up a 2.1 Million Tonne (MT) capacity cement plant at Bokaro.
The signatories to the agreement were V K Srivastava, Managing Director of SAIL's Bokaro Steel Plant (BSL), and S K Sharma, Executive Vice-Chairman, JAL, S K Sharma.
Equity participation by JAL and SAIL in BJCL will be in the ratio of 74:26. The initial authorised paid-up capital of the company will be Rs 50 crore raised through a debt-equity ratio of 70:30.
The proposed cement plant at Bokaro is second JV os SAIL and will come up in just over two years' time at an estimated cost of Rs 405 crore. It will manufacture cement using the slag generated by BSL's blast furnaces.
SAIL has decided to diversify into cement production in a phased manner. However, in order to leverage the competence of established cement players, the company has decided to adopt the joint venture route for diversification.
SAIL's first JV cement company, Bhilai Jaypee Cement Limited, was incorporated in April 2007 for setting up cement plants at Satna in Madhya Pradesh and Bhilai in Chhattisgarh. After commissioning in 2010, the company will produce and market more than 2 million tonnes of portland slag cement per annum.
SAIL is also exploring formation of a similar joint venture company for utilisation of slag generated at Rourkela Steel Plant for which selection of a joint venture partner is already underway.
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