ACC to scale up cement production capacity

Kolkata: ACC, country's leading cement maker is planning to scale up its cement production capacity from its present 23 million tonnes (mt) to 30.4 mt by 2010 inspite of mounting input costs in order to combat margin pressures and increase sales.

Speaking on the sidelines of the launch of “ACC Help”, the services bouquet offered by the company to individual house builders (IHB), Vivek Agnihotri, director for sales of the eastern region, said, “Rising input cost, rise in taxes combined with inflation, all affected sales and operating margins across the industry per se, but in order to combat that and maintain 2007 levels the company has decided to focus on augmenting capacity.”

ACC posted a decline of 7.7 per cent in its net profit at Rs 259.98 crore for the quarter ended September 30 from Rs 281.79 crore in the corresponding three-month period last year

“The company's last quarter results were more or less equal to same period last year as it compensated marginal pressure largely through capacity augmentation and volume, so the focus would be on that besides building on the customer base”, said Agnihotri.

The company had 14 cement plants with a total annual production capacity of 23mt which it plans to scale up to 30.4mt by 2010.

The capacity augmentation would come from expansion existing cement plants and from two new plants coming up in Uttar Pradesh and Karnataka, both under construction.

The company was looking at tapping the rural and city based urban individual home builders (IHB) who contributed around 85-90 percent of ACC's total sales.

It aimed to be a leading construction solutions provider and recently launched 'ACC Help' run through ACC-help vans, expert advisers and civil engineering guidance under one brand.

Initially this would come free of cost to IHBs tapping any of the 17 ACC help centres across the country or visiting the ACC website. This would help expand the customer base and push capacity utilisation in the next 2-3 years through higher sales.

The company grew at 8-10 percent and recorded annual sales of Rs 8000 crore last financial year. Northern and eastern India were the company's biggest markets with North contributing almost 50 percent of total cement sales, and East another 17 per cent. ACC had one help centre in Bhubaneswar.