FL Smidth, Denmark's largest
engineering company, announced on 8 September 2006 the winning of a $44 million
contract (Rs.200 crore) for building a cement plant for Zuari Cements, now a
wholly-owned subsidiary of Italcementi -- Italy's largest cement producer.
The greenfield cement clinker unit
with 5,500 tpd capacity will come up in Zuari Cement's existing premises of the
Yeraguntla plant in Andhra Pradesh. The project is targeted for completion in
2008.
The existing cement plant was also
supplied by FLSmidth in 1981. FLSmidth's Indian project division in Chennai
conducted the negotiations for this new contract and will also be responsible
for implementing the project. This contract is FLSmidth India's largest project
so far.
Over the coming 21 months, the Indian
project division will supply all the machinery and auxiliary equipment for the
cement production line. The scope of the contract includes ATOX vertical mills
for raw material and coal grinding and an OK vertical mill for cement grinding.
Also included are a three-support kiln with an ILC preheater and an SF Cross-Bar
cooler, according to a statement issued by FLSmidth. In addition, FLSmidth is
responsible for supervision and commissioning.
FLSmidth has been active in the Indian
market since 1912.
Background: This order is part of
Italcementi's announcement in June 2006 of investing Rs.800 crore in India
within two years. Besides this clinker unit, the investment would be used for
setting up a captive power plant and a cement grinding unit.
Italcementi entered India in January
2001 when it formed a 50:50 joint venture with Zuari Cement (part of the KK
Birla Group). In early 2002, the joint venture took over the entire shareholding
of India Cements in Sri Vishnu Cement for an enterprise value of Rs.385 crore.
Zuari Cement has a 2 million tpa cement plant at Yerraguntala while Sri Vishnu
Cement operates a 1.2 million tpa cement plant at Nalgonda. Both the plants are
located in Andhra Pradesh.
Italcementi in mid-May 2006 reached an
agreement with Zuari Industries to acquire the latter's entire shareholding in
Zuari Cement for 100 million euro. With this, Zuari Cement became a wholly owned
entity of the Italcementi group.