Ambuja may relocate proposed Bihar unit

Ambuja Cements, the country’s second largest cement-maker, may shift its upcoming project in the Barh district of Bihar, a part of its Rs 1,000-crore expansion project for grinding capacity, citing law and order issues.

Ambuja Cements Managing Director A L Kapur said, “We are going slow on the Barh grinding unit in Bihar. We may shift the project to an integrated cement plant. We have got the land there (Barh) and in future we can visit the site.” When asked why the location was being shifted, Kapur said it is because of the “law and order” situation in the region.

The company had earmarked an investment of around Rs 140 crore for the 1-million-tonne unit at Barh, which is close to Patna.

Similar indications were given a fortnight ago from the top-management of southern major India Cements regarding shifting of its proposed cement project of 2 million tonnes in Himachal Pradesh due to infrastructure hurdles.

The Barh project, slated to go on stream in the first-half of 2010, was among the four locations — Dadri (Uttar Pradesh), Nalagarh (Himachal Pradesh) and Ahmedabad (Gujarat) being others — for the grinding units, whose overall capacity was estimated at 5.5 million tonnes.

According to industry analysts, the company would most likely take the project to the nearest integrated unit where clinker facility is also available. Ambuja Cements’ integrated unit at Bhatapara in Chhattisgarh is closest to the Barh unit.

Even though Bihar consumes around 4.5 million tonnes of cement annually, it has only one cement plant — Kalyanpur Cements — in the Rohtas district with a capacity of 1 million tonnes a year. The rest of the state’s requirement is met from the neighbouring states such as Madhya Pradesh and Jharkhand.

Ramit Budhiraja, regional head (east), ACC, said, “There are enough capacities coming up in Chhattisgarh and Jharkhand, which will cater to the Bihar market. So, I believe there is no need for any more capacities in the state.”

Kalyanpur Cements Managing Director Shailendra Sinha said, “Demand for cement has increased in the state in the last few years. There will be a market for cement as infrastructure projects come up even though demand got subdued during the monsoon.” The firm will ramp up its capacity to 1.4 million tonne within two years.