OCL India Ltd, part of the Dalmia Group, is planning to raise around $40 million from International Finance Corporation (IFC).
The proposed fund raising is to support the company's $102 million investment plan to set up a 1.35 million tonne per annum (MTPA) cement plant at Medinipur, West Bengal.
The Project will be located at Kulapachuria, Salboni sub-division, Medinipur district in West Bengal. As a part of developing Godapaisal Industrial Park, the West Bengal Industrial Development Corporation has acquired and leased 154.43 acres of land to OCL as the anchor investor.
The investment cost for the project is estimated at $102 million and IFC is evaluating an A-Loan of $40 million to part finance the project. The balance funding requirement will be met through Rupee debt and internal accruals, said the Corporation.
The project is expected to take 27 months to construct and will be operational by January 2014. It will contribute around $7 million per annum of tax revenues to the exchequer, according to OCL's project disclosure.
The Project will utilise clinker from OCL’s existing cement plant at Rajgangpur, Orissa.
The plant will manufacture 100% Portland Slag Cement (PSC) to suit the market needs with an option to manufacture Portland Pozzolana Cement (PPC) or Ordinary Portland Cement (OPC) at a later stage depending upon market demand.
Clinker will be transported by rail from Rajgangpur while coal/slag/fly ash/gypsum will be transported by road. Cement will be dispatched both by road and rail.
According to OCL's project disclosure, the Project will create 150 direct and 120 sub-contracted jobs upon project implementation. It will also create 10-15 managerial jobs and 500 construction jobs during its peak construction.
IFC has already invested in OCL India, which is a leading cement producer in eastern India, with a capacity of 3.8 MTPA. The company started manufacturing cement in 1952. OCL also manufactures refractories.
Dalmia Cement (Bharat) Limited, the flagship company of the Dalmia Group, is the largest shareholder in OCL with a 45% stake and the Dalmia family collectively controls 70% in OCL. The remaining 30% is owned by the general public and institutional investors.