Centre encourages hike in demand for cement in the Northeast

Kolkata, Feb 14(UNI) Encouraged by the high growth in demand, the Barak Valley Cements Limited(BVCL) in Asom has embarked on a major expansion programme at a cost of Rs 45 crores, besides planning to approach the capital market for raising necessary funds.

Announcing this and other future plans of the Rs 250 crores Silchar based company, BVCL Chairman Bijay Garodia here today said of the Rs 45 crores, more than Rs 22 crores were being spent for the setting up of a six megawatt bio-mass based multi-fuel power plant near the existing unit to meet the entire requirement of electricity for the present unit.

"The new integrated environment-friendly power plant when come up by the end of the current year, would go a long way in increasing the daily production capacity of BVCL by about 200 tonnes from the present capcity of 450 tonnes per day," Mr Garodia said.

Asked about his plan to approch the capital market for raising Rs 50 crores through IPO via book building process to part finance his comprehenvie expansion programme in the coming years, the BVCL chief said, however, the Board of Directors of the closely held company was yet to decide on the date of the proposed issue.

About the steady growth in demand for cement in the Northeast, Mr Garodia said in the wake of the department of DONER's recent announcement of the central allocation of Rs 50,000 crores for construction of roads in the North East during the 11th plan would itself push the demand for cement in the region by over 15 per cent per annum from the present about 3.5 million tonnes.

Moreover, the present retail and other construction boom in the Northeast in tune with the Centre's Look East Policy, would jack up the demand for cement quite substatially during the coming years, Mr Garodia hoped.

Regarding his plan to go west to Jharkhand and Orissa, where BVCL had already bid for the acquisition of two lime stone mines for sourcing the raw material, Mr Garodia said if they were allotted the mines they might set up a similar unit in either of these two states with higher capacity.

"However, we are very conservative in our approach in view of the requrement of huge funds for that purpose," Mr Garodia said but did not rule out the possibility of another bigger public issue to raise funds for the proposed plant.

UNI