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Assam firm plans big expansion after new policy

BVCL will invest Rs 400-500 million to encourage industry in India's northeast coming into effect this month.

business Updated: Apr 17, 2007 10:43 IST

The Assam-based Barak Valley Cements Ltd (BVCL) will invest Rs 400-500 million as part of big expansion plans, with a new policy to encourage industry in India's northeast coming into effect this month.

BVCL chairman Bijay Kumar Garodia hailed the North-East Industrial and Investment Promotion Policy (NEIIPP), which gives considerable capital subsidy and tax exemptions to investors in the region.

"This policy will give a big boost to industries in the northeast. We are going to take advantage of this and invest around Rs 40-50 crore (Rs 400-500 million) in expanding our plant in Assam. This is the biggest private sector investment in the Barak valley," Garodia told the agency.

BVCL's cement manufacturing plant is located at Badarpurghat in the Barak valley in southern Assam. Its operations include raw material procurement, crushing, grinding, blending, grinding and packaging of cement. The company, which has offices in Guwahati, Kolkata and New Delhi, makes both Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC).

Following the fresh investment, the plant's production is expected to increase from the current 300-460 tonnes per day (TPD) to 600 TPD after a wholly-owned subsidiary of the company, Cement International Ltd (CIL), sets up a new 300 TPD cement grinding unit at Badarpurghat.

The company's customers are primarily in the northeast, and most of them are based in the Barak valley and the neighbouring states of Mizoram and Tripura. These include various trade and non-trade bodies, the Assam Rifles, the Border Road Task Force, ONGC and the Central Public Works Department.

Another subsidiary of the company, Badarpur Energy Private Ltd (BEPL), will be setting up a 6 MW biomass captive power plant, the first such plant in Assam. The plant will feed the company's units in the area.

"The power plant will be totally pollution free and the cost of power produced by BEPL will be Rs 2.25 per unit," BVCL managing director Prahlad Rai Chamaria said.

"We have been facing a lot of power problems in running our plant. Hopefully, once the new power plant becomes operational in June this year, these problems will end," he said.

The chronic power shortage in the northeast is one of the primary reasons, apart from the real or perceived poor law and order situation, that potential investors cite for not going to the region.

Asked whether the company had any problems with the law and order situation during the course of its operations, Garodia said emphatically, "Never. The Barak valley is completely peaceful. Maybe there are a few incidents now and then in the neighbouring NC (North Cachar) Hills district. But not in Barak valley."

In the course of the expansion, a third subsidiary of the company, Meghalaya Minerals & Mines Ltd (MMML), is setting up an 800 TPD limestone crusher unit at Lumshnong in the Jaintia Hills in the neighbouring state of Meghalaya. Limestone is a key raw material for cement production.

Following the implementation of these expansion plans, the promoters expect that there will be direct and indirect employment for 2,000-3,000 people in the region.

First Published: Apr 17, 2007 10:37 IST