Birla Corp Slams Lid On Readymix Concrete Plan

Birla Corporation, the Madhav Prasad Birla group flagship, has abandoned its plan to produce ready-mix concrete following loss of interest by its joint venture partner in the manufacturing project.

The Rs 1,021-crore diversified Birla company had floated a joint stock firm - Birla Redland Readymix- in association with Redland Plc, UK, on January 21, 1997.

The project did not make much progress as the promoters of the joint venture had decided to keep the ready-mix concrete project in abeyance. In 1999-2000, the company commissioned a feasibility study.

Birla Corporation has now decided not to pursue the project. The reason, according to the company, was "the foreign partner's unwillingness to carry on further."

 

The company's annual report for 2000-01 added: "Redland Plc, UK, the joint venture partner, is not optimistic about the prospects of ready-mix concrete in India and hence have intimated their unwillingness to go ahead with the project."

Ready-mix concrete was introduced in 1930s in the UK and has since been in common use in the west.

In developed countries, it accounts for nearly 70 per cent of the total concrete requirement. Only 5 per cent of concrete use in India is in ready-mix form, despite its introduction in the 1990s.

In a separate development, Birla-DLW, another joint venture of Birla Corporation with DLW AG, suffered during the last fiscal as export orders from the German partner was insufficient.

The order position became so poor that the firm had to undergo suspension of work.

However, efforts to develop the domestic as well as overseas markets have started yielding results.

Overall performance of Birla Corporation during 2000-01 was marginally better than the previous year.

In 2000-01, gross profit before interest grew 41.77 per cent to Rs 65.67 crore. Interest cost came down by 17 per cent to Rs 43.17 crore. Cash profit stood at Rs 21.96 crore against a cash loss of Rs 6.21 crore.