Prism Cement plans 9.3 mtpa plant in AP

Decks have been cleared for a 9.3-million tonne cement plant being set up in Andhra Pradesh by Mumbai-based Prism Cement Limited. The state cabinet on Saturday decided to allot 1,000 acre land for building the factory and township in Kurnool district. The proposal from the company was pending with the government for quite sometime.

The company, promoted by Rajan Raheja Group, has proposed to complete the project in two phases in the next three years with an investment of about Rs 1,200 crore, officials told Business Standard.

Prism Cement, a multi-product building material company, currently operates a 3-million tonne cement plant at Satna in Madhya Pradesh and has plans to expand the capacity at the same location.

It will be the latest addition to the cement manufacturing sector in Andhra Pradesh, the lone cement surplus state in the southern region having endowed with one of the largest limestone reserves in the country.

The state has an installed capacity of over 40 million tonnes in cement production while it consumes a little over 20 million tonnes annually.

According to the officials, Prism Cement already holds a mining lease of over 600 acres of limestone reserves in the state and had also got environmental clearances for the proposed project.

Though any investment upwards of Rs 200 crore is considered as a mega project for the purpose of additional incentives, the government has not offered any tax concessions to Prism as has been the case with other cement units, according to the officials.

The existing companies are opposing sales tax rebates to new cement units as it takes away the level-playing field in a market that is already crammed with surplus capacities.

The company is yet to unveil the details as to how it is going to raise funds for the proposed AP project. It posted a consolidated net loss of Rs 79 crore for the quarter ended September, 2011 even as sales grew 34 per cent to Rs 1,079 crore from Rs 795 crore in the same quarter a year ago.