Cement cos eye Orissa limestone reserves

Cement cos eye Orissa limestone reserves

Cement manufacturers such as Shree Cement Ltd, JK Cement Ltd and Binani Cement Ltd are looking at applying for limestone reserves in Orissa.

These firms had expressed interest in forming a joint venture with National Aluminium Co. (Nalco) to install a grinding unit to manufacture fly-ash cement in Angur in Orissa.

Nalco had invited expression of interests in August from the cement manufacturers to set up a grinding or blending unit to use the two million tonne fly ash that its captive power plant produces. Nalco met the cement manufacturers in September to discuss plans of grinding units. The manufacturers, however, said they are looking at setting up a composite unit instead of a stand-alone grinding unit.

“Right now, we can only set up a grinding unit. Once we get a go ahead to put grinding unit from Nalco, we will ask Orissa government for limestone reserves," says H.M. Bangur, joint managing director of Shree Cement. Limestone is used for making clinker, which is later blended with fly ash to make Pozzolana Portland Cement (PPC), a commonly used form of cement in India.

A composite cement manufacturing plant is an integrated process of making cement, which will have the clinkering unit and grinding unit in one place.

India has seen the demand for cement grow at the rate of 8-11% over the last three years. Due to supply-side constraint and the boom in infrastructure and construction, cement manufacturers are adding capacity of around 85 million tonne per annum (mtpa) over the next three years.

“We have made a bid to Nalco. We have also applied for a mining (limestone) lease. We hope to get it so that we can have a plant with 1mtpa capacity," said A.K. Saraogi, president (corporate affairs) and chief financial officer of JK Cement. Nalco officials could not be reached for a comment.

“Manufacturing of cement by an integrated process has a lot of advantages. The margins are higher in case of composite unit. If they set up only a grinding unit, they will have to buy clinker from somewhere else and transport it to their unit which results in squeezing of margin. So, it makes economic sense to put up a composite unit instead of a stand-alone grinding unit," says Rupesh Sankhe, an analyst with ICICI Direct.

“We have had the first round of talks with the Nalco officials. We are looking at setting up a composite cement manufacturing unit with a 2mtpa capacity. When once we get JV indication from Nalco, we will apply for limestone mining licence as well," said Vinod Juneja, joint managing director of Binani Cement.