CORRECTED - Jaiprakash Associates to sell cement unit to UltraTech

(Corrects capacity to 4.8 million tonnes from 4.9 million tonnes in second paragraph)

MUMBAI (Reuters) - Jaiprakash Associates Ltd has agreed to sell its cement plant in Gujarat to UltraTech Cement for an enterprise value of 38 billion rupees in an attempt to lower its debt.

UltraTech's capacity will rise to 59 million tonnes after the acquisition of the unit, which has a capacity of 4.8 million tonnes, Kumar Mangalam Birla, chairman of UltraTech, said in a statement.

The company expects the transaction to close in seven to nine months.

Debt-laden Jaiprakash Associates, which also has interests in power and infrastructure, has been trying to sell its Gujarat cement plant for more than a year and was in talks with several potential buyers, including Ireland's CRH .

Rising input and energy costs have been squeezing margins at cement companies, while demand remains a worry amid a weakening economy and high interest rates, which have slowed housing and infrastructure development in Asia's third-largest economy.

(Reporting by Devidutta Tripathy and Sumeet Chatterjee; Editing by Prateek Chatterjee)