Announcement of India Modernizes Cement Industry on May 17, 1990

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. * Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 90/ 79 Contact: Leandro V. Coronel (202) 477-3641 INDIA MODERNIZES CEMENT INDUSTRY WASHINGTON, May 17, 1990 -- India will increase cement production, particularly in regions that have been experiencing shortages, under a project supported by a $300 million loan from the World Bank. The project supports the elimination of controls on the price and distribution of cement. It also supports measures to make the cement industry more competitive by increasing its efficiency and helping it to grow. The project will expand cement manufacturing capacity in eastern and northern India and will modernize and restructure existing cement companies throughout India. It will also help establish a pilot bulk-cement transport system at Kalamboli Railway Terminal, near Bombay. Training will be provided to cement-plant workers at selected regional centers, as well as technical assistance to the Office of the Development Commissioner for the Cement Industry to improve the mini-cement sector, which covers companies that produce less than 200 tons of cement a day. The project includes environmental protection and pollution control measures. In restructuring and modernizing cement companies, the project will reduce energy and other production costs and will improve the efficiency of operations. It will reduce the cost of cement in some of the poorest regions of the country and will create significant savings in transporting cement. Increased production in shortage-plagued regions is estimated to be 5 million tons of cement a year. Cofinancing for the $736 million project will be provided by the Danish International Development Agency, India's cement industry and other sources. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.75 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. NOTE: Money figures are in U.S. dollar equivalents.