Zuari to re-enter cement business

04 Jun 2010

Zuari Industries is re-entering cement business after exiting it four years ago. The initial plan is to set up a three million tonne cement plant at Gulbarga in Karnataka. The project would absorb an investment of Rs 1,500 crore and is expected to commence from mid-2011. It will be funded through a mix of internal accruals, borrowings and a possible equity issue.

The company had sold its equity stake in the cement business to joint venture partner Italcementi in 2006. The Italian cement giant has the right of first refusal to undertake either jointly or wholly the proposed cement unit that is at present housed under Gulbarga Cement. But the rights expire in October and Italcementi has not shown any interest in the project as yet.

Besides re-entering cement, Zuari also has plans to invest around Rs 5,790 crore for expanding the core fertiliser business. A large part of this will be used for a Rs 5,000 crore greenfield ammonia urea complex of 1.1 million tonnes. Zuari may consider raising fresh funds through a public issue for this project. crackcrack
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