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Ambuja Cement Eastern makes a turnaround

Kohinoor Mandal

KOLKATA, Aug. 9

GUJARAT Ambuja's sick subsidiary, Ambuja Cement Eastern Ltd (ACEL), which was formerly known as Modi Cement Ltd, has turned around during the accounting year ended June 30, 2001. Gujarat Ambuja holds its stake in ACEL through the holding company Ambuja C ement India Ltd.

The company's turnover increased by 32.3 per cent to Rs 351.60 crore from Rs 260.92 crore in the previous fiscal. Against a net loss of Rs 41.65 crore in 1999-2000, ACEL recorded a net profit of Rs 6.90 crore, but there was no provision for taxes.

Mr Harshavardhan Neotia, Managing Director of ACEL, said the company had achieved its internal target, namely, coming out of the red.

``We have performed well to register a profit and from here we will try to capitalise on it,'' Mr Neotia told Business Line.

In 2000-01, production and sales of cement and clinker registered growth. Production of clinker increased by 8.35 per cent, from 9.58 lakh tonnes to 10.38 lakh tonnes. Cement production increased by 11.6 per cent to 13.99 lakh tonnes from 12.54 lakh tonn es. Cement sales increased by 11.7 per cent to 14.03 lakh tonnes, against 12.56 lakh tonnes of the previous year.

In December 2000, ACEL made a preferential allotment of 1.5 lakh shares to the promoter company, Ambuja Cement India. The face value of the share was Rs 10 and a premium of Rs 13 was charged. With this, the capital base of the company increased from Rs 1 78.30 to Rs 193.30 crore.

In January, the new one million-tonne per annum cement grinding unit of AECL was inaugurated by the West Bengal Chief Minister, Mr Buddhadev Bhattacharjee. The unit, located at Sankrail near Kolkata, cost Rs 140 crore. ICICI gave a loan of Rs 100 crore a nd the rest was funded from internal resources.

The plant is catering to the eastern and north-eastern markets. ACEL was already selling about 50,000 tonnes of cement in West Bengal, produced at its unit at Bhatapara in Chattisgarh. Clinker for the Sankrail unit is supplied from the Bhatapara facility .

ACEL was acquired by Gujarat Ambuja three years ago under a rehabilitation scheme approved by the Board for Industrial and Financial Reconstruction. Since the company was still in the revival process, provision for taxes had not been necessary, Mr Neotia said.

In the last fiscal, ACEL installed a 10 MW diesel generator (DG) set at the Bhatapara unit for Rs 28 crore. The clinker capacity was increased to 4,000 tonnes per day from 3,300 tonnes per day at a cost of Rs 15 crore.

The first unit of the Sankrail plant, commissioned in February 2001, recorded 100 per cent capacity utilisation. ``For the second mill, there was hardly any time to record this figure as it was commissioned only on June 16,'' Mr Neotia said.