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Low demand has ACC forestall RMC expansion

A poor demand in the domestic market has compelled the country’s largest cement maker, ACC, to indefinitely put on hold its Rs600-crore expansion programme of ready-mix concrete (RMC) business. The credit crunch has seen demand from developers fall drastically.

The company, which currently has 650 employees, had also laid-off 165 people. The demand for RMC, which is primarily used by developers in residential projects, has been constantly falling owing to decline in sales in property market and non-availability of lending for the realty players.

ACC Concrete, the RMC business of ACC, had planned to invest Rs600 crore to add 200 plants across the country by 2012. It plans to increase the number of plants to 40 from the current 32 and will then stop expanding.

ACC is, however, going ahead with its planned expansion programme of increasing the capacity to 30 million tonnes by 2010 from the current about 23.5 million tonnes with addition of three plants in the country.

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