Gujarat Ambuja Cements all set for expansion

S Lakshmi Narasimhan
13 February 1999

The Gujarat Ambuja Cements management is readying itself for further expansion. After having signalled its acquisitive intentions with the takeover of Modi Cements, the company is now preparing to build more greenfield facilities.

The company plans to invest Rs.1,400 crore in greenfield plants. Most of the expansion will be in the southern India.

While acquisitions are a cheap and faster way to expand, they are not always easy to arrange. The company clearly doesn''t want to wait and watch. The company, whose main presence has so far been in the western and north-western markets, is going in for fresh capacity in the south. The idea is clear -- it wants to become a national player in a hurry.

A 6 million tonne capacity (three plants of 2 million tonnes each) is being set up in Andhra Pradesh. These plants will feed the southern market. The company has taken limestone quarries on lease throughout the country, which will enable it to have uninterrupted supply of the crucial raw material. Andhra Pradesh has large deposits of limestone. The company has a seven per cent stake in the Andhra Pradesh-based Priyadarshini Cements, which it is reportedly not keen on increasing.

Among the locations Gujarat Ambuja Cements is considering for its greenfield projects are Jammu & Kashmir, West Bengal and Maharashtra.

In the meanwhile, it has laid the foundation stone for a half-million tonne grinding unit in Colombo, which will be fed with clinker from the company''s Gujarat facility. The investment involved: $20 million (around Rs.85 crore).