India's Anil Dhirubhai Ambani Group Announces Investment of $16.9 Billion in Madhya Pradesh

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Researched by Industrial Info Resources (Sugar Land, Texas)--Leading business conglomerate Anil Dhirubhai Ambani Group (ADAG) (Mumbai) has announced plans to invest $16.9 billion over five years on various projects in Madhya Pradesh. Making the announcement on the sidelines of the two-day "Global Investors Meet - 2010," which was organized by the state government of Madhya Pradesh, Anil Ambani, the chairman of ADAG, said that the company plans to establish one of the largest private-sector coal-mining projects in the state, with a capacity of 25 million tons per year.

As part of the proposed investment, ADAG will build a 10 million-ton-per-year cement plant, the capacity of which is likely to be doubled in the future. ADAG also has proposed establishing a university in the capital city of Bhopal, and reports indicate that the state government already has cleared 100 acres of land for the project. The proposed outlay over the period will translate into an investment of $13.53 million every working day. The proposed projects and investments in Madhya Pradesh are expected to create 100,000 jobs in the state.

Commenting on the decision to establish a cement plant, Ambani indicated that fly ash from the company's power plants in the state would be utilized to produce high-grade cement. With abundant limestone reserves in the state and the availability of fly ash, cement plants in Madhya Pradesh are expected to prove cost-effective.

Giving details about the power projects planned, Ambani said that the company is likely to invest about $902,120 per megawatt in the state. Presently, ADAG's domestic energy portfolio consists of 1,033 MW of operating power-generating facilities. There are plans to increase capacity to 5,000 MW by 2012 and 20,000 MW by 2013. The power plants in Madhya Pradesh are expected to help ADAG achieve this target.

The company has several power projects with a combined generating capacity of 12,000 MW in various stages of construction in India. ADAG is also expected to begin construction of a 4,000-MW power project in Chitrangi, in the Singrauli district of Madhya Pradesh. This project is in addition to the 3,960-MW pithead, coal-based ultra-mega-power project in Sasan. Early last month, ADAG announced that its coal mines had reserves of 2 billion tons, an amount that would be sufficient to generate 20,000 MW of power.

Madhya Pradesh, which is among the least industrialized states in India, is following in the footsteps of Gujarat and Karnataka to attract domestic and international investments. In the recently concluded global meet, which was attended by delegates from 17 countries, 106 memoranda of understanding that were valued at more than $53 billion were signed. These included 22 deals worth more than $28 billion on the first day and 84 deals worth more than $24 billion on the second day of the summit. The power sector attracted the largest share of investment, valued at about $30 billion. Several Indian companies, including Essar Group (Mumbai), Videocon Industries Limited (BSE:511389) (Aurangabad, Maharastra), NTPC Limited (BSE:532555) (New Delhi) and GAIL (India) Limited (BSE:532155) (New Delhi), participated in the event.

NTPC is proposing to invest $451 million to build a 3,960-MW, coal-fired power project at Barethi. The project will be commissioned during the 12th Five-Year Plan (2012-17). The Essar Group signed an agreement to construct a 100,000-ton-per-year ferroalloy plant and a 5 million-ton-per-year cement plant in the state. Both projects will be built in phases. The company, which already has announced an investment of $1.8 billion in the state's power, steel and telecom sectors, will invest $451 million on the ferroalloy and cement projects.

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