SHILLONG, MAR 9: The state government is considering a joint venture with a private entity to operate the Mawmluh Cherra Cements Limited (MCCL).
“The state government is presently preparing the cabinet memorandum seeking the approval of the cabinet for the joint venture proposal of MCCL,” Chief Minister Conrad K Sangma said while replying to a call attention notice moved by opposition chief whip and Mawlai MLA Process T Sawkmie in the Assembly on Tuesday.
Sangma informed that he had convened a meeting on July 22, last year with the local representatives, government officials and stakeholders of Sohra Syiemship and Mawmluh Durbar to discuss the current status and the strategies which could be adopted for reviving the fortunes of the MCCL.
The meeting was attended by MCCL chairman Wailadmiki Shylla, Sohra MLA Gavin Mylliem, Shella MLA Balajied Synrem and KHADC CEM TW Chyne.
He said an independent study conducted in August, 2019 estimated that an amount of Rs 190.32 crore will be required to revive the MCCL.
“After due consideration, it was felt that the state government had three options with regard to MCCL – to restart the operations at MCCL with the support of fresh infusion of funds by the state government and intense mining as an additional source of revenue generation, restart operations by inducting a joint venture partner in MCCL through partial divestment of equity stake in favour of the joint venture partner and taking cognizance of the current financial & operational situation of MCCL, the financial situation of the state government and the environmental challenges resulting from the discovery of the Mawmluh caves in close proximity to the limestone mines, stop the operations at MCCL and wind up the company,” Sangma said.
Stating that he again convened another meeting on September 24, last year, the chief minister said, “Since the state government is not in a position to invest the amount of Rs 190.32 crore on MCCL due to the financial constraints, the first option was not found to be viable. Similarly, the third option was also not considered to be an acceptable choice. As such the meeting unanimously decided to explore option 2, which is to enter into a joint venture with a private entity who has the capacity for making significant investment in the plant.”
The Mawmluh Cherra Cements Limited (MCC) originally named as Assam Cements Limited was incorporated on May 20, 1955.
After bifurcation of the state, the company was renamed as MCCL in May 1974. MCCL went into commercial production from the wet process plant from November 15, 1966.
Initially it started with one kiln of 250 TPD. Thereafter, an expansion programme was embarked upon to increase the capacity by addition of two more kilns of 340 TPC each.
With the decontrol of cement from March 1, 1989 along with a successful reactivation programme in the 1990s, MCCL began to earn profits. With the improvement in the financial position of the company, in 1994-95 the company had liquidated all loans taken from the state government and financial institutions.
From 1994-95, the company was totally ‘debt free’. The company remained profitable from 1988-89 till 2006-07. During this period up to 2006-07, MCCL did not require any financial support from the state government.
It may be mentioned that the cement produced by MCCL in the late 1980s and early 1990s was sought after throughout the region.
From 2007 onwards, the company started to face financial difficulties on account of not being able to generate revenue on account of the low productivity due to the aging of the plant besides the increase in operational expenses.
The old wet process plant was finally discontinued in August 2014.
From September 2006 onwards, the company concentrated on efforts to complete the installation of the 600 TPD Dry Process Plant.
After much delay, the commencement of the commercial production of the dry process plant started on September 26, 2016 at a total cost of Rs 142.97 crore.
The installed capacity of the plant is 1.80 lakh MT per annum that is 15,000 MT per month. However, the new plant could not attain the production levels to sustain it.
The average production of the plant during the three years period i.e April 2017 to March 2020 was only about 40,000 MT per annum.
The production was way below the break even level which resulted in the company not being able to cover even the fixed costs.
By Our Reporter
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