The Associated Cement Companies, after acquiring an 86.79 per cent stake in IDCOL Cement from the Orissa government, is set to buy out Unit Trust of India's 13.21 per cent stake in the company.
The acquisition of IDCOL Cement's 1 million tonne plant at Bargarh, Orissa, will make ACC the largest cement manufacturer in India, with an installed capacity of close to 18 million tonnes per annum, ahead of Larsen & Toubro's 16.5 million tonnes.
Ashok K Jain, executive director, ACC, said: "UTI has expressed an interest in selling its stake to us. However, we will take a final call on the issue after completing the formalities of acquiring the 86.79 per cent stake from the Orissa government."
ACC's Rs 176.41 crore (Rs 1.76 billion) bid for the Orissa government's stake in IDCOL Cement was approved on Tuesday, by the Cabinet Committee on Divestment.
IDCOL Cement had been continually making losses for the last nine years and has accumulated losses of Rs 150 crore (Rs 1.5 billion).
"We are looking at making the company profitable by the end of the next financial year. At the outset, we will be optimising the existing facilities," Jain said.
In 2002-2003, IDCOL Cement incurred a loss of Rs 21 crore (Rs 210 million), and has liabilities of about Rs 110 crore (Rs 1.1 billion).
ACC has also lined up expansion plans for IDCOL Cement, to take its existing capacity to 2 million tonne in the next 3-5 years.
"The existing limestone reserves are not enough to double the plant's capacity. We would be looking at fresh reserves to increase the capacity," Jain said.
The expansion also includes increasing the clinker capacity by 35 per cent, which is possible with the existing limestone rerserves, Jain added.
ACC was overtaken by Larsen & Toubro a year ago as the largest cement manufacturer in the country, when L&T had increased its capacity to 16.5 million tonne per annum, against ACC's capacity of 16.2 million tonne per annum last year.
"In the past year, we have reached 16.7 million tonne per annum, through debottlenecking. Brownfield expansions will continue and by the end of this financial, we should be close to 18 million tonne," Jain said.
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