ACC will expand ready-mix business

Tata group cement maker Associated Cement Companies is planning a substantial expansion of its capacity to make ready-mix concrete. The aim: to improve value added in the group's cement operations.

ACC plans to build eight new ready-mix concrete making facilities at a cost of Rs 30 crore.

These facilities will be located in and around the big cities of Mumbai, New Delhi, Chennai and Hyderabad. RMC capacity will rise from the current 7 lakh tonnes per annum to 1 million tonnes. Simultaneously, in order to retain its lead in the cement business, ACC is going in for a capacity expansion of 3 million tonnes per annum. The cost is estimated at Rs 700 crore. This expansion will take ACC's capacity to 15 million tonnes from the current level of 12 million tpa.

Ready-mix concrete, which is the preferred form of cement in developed countries, accounts for a small fraction of the output of cement companies. One reason for this is that Indian builders have preferred to mix concrete on-site. At one level, this was considered cheaper to do. At another, it allowed many unscrupulous builders to cut corners by using inferior materials.

However, with some reputed business groups entering the construction business, and some established builders preferring RMC, the prospects for the readymade material have improved enormously. Acceleration of certain infrastructure construction such as roads and bridges and fly-overs has also boosted demand for the material.

The advantage with the material is that while it is costlier, it comes with a certain assured and consistent quality. Its use also reduces construction time since one part of the operation is eliminated.