November 20, 2008

ACC may invest INR 150 crore in RMC business

ET reported that Associated Cement Companies is betting big on its ready mix concrete business and plans to double its RMC units to 46 in 2008. As per report the company would need to invest INR 150 crore to achieve this target.

Mr Sumit Banerjee MD of ACC’s recently said that “RMC is the future business as margins are higher compared to retail. Bulk users in the real estate business increasingly use RMC to save on time and cost overrun in projects.”

He said in order to scale up its RMC business ACC transferred this unit to a wholly owned subsidiary ACC Concrete. Last year, the company earned INR 367.02 crore from the business. However, RMC’s contribution to the company’s total business is not much. ACC posted total sales of INR 7,067 crore last year.

ACC Concrete is replicating the Holcim process of RMC solutions in India. These solutions include products which aid in construction techniques, speed of building and utilizing sustainable construction materials. Holcim, through its private subsidiary ACIL, holds 46% stake in ACC.

ACC’s total capacity is being hiked to 23.3 million tonnes per annum from 22 million tonnes per annum by 2008. It has 12 plants across the country and is the leader in eastern and north Indian markets.