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ACC plans fresh handshake to slash 1500 jobs

Rumi Dutta

The country's largest cement-maker, ACC, has decided to prune its workforce again, this time by 1,500 employees in the current financial year. The move will see the firm's employee strength decline from around 8,900 employees to around 7,400.

This will be the second major voluntary retirement scheme by ACC in two years. Last year, it pruned its employee strength by 700 people.

As part of its cost-reduction drive, the company is also planning to reduce its debt burden by 10 per cent during this financial year from the current level of Rs 15 billlion. ACC pre-paid institutional debt, primarily to ICICI, of around Rs 1 billion in the fourth quarter of the last financial year.

N H Italia, ACC's president (finance), told Business Standard: "The cost profile of our company over the past year has seen a significant improvement. We have successfully reduced our average cost of borrowings to 9.6 per cent, which is 250 basis points lower than the previous year's. We propose to further reduce debt by Rs 1.50 billion in the current financial year. We will also offer a VRS that could see our workforce decline by around 1,500."

However, Italia did not disclose the estimated cash outflow on account of the VRS.

ACC has managed to maintain a low interest outgo despite investments in the company's Wadi project in Karnataka that was set up during the year at a cost of Rs 5 billion.

The firm's planned capital expenditure for the current financial year is around Rs 3 billion, primarily on the 15-MW thermal power plants at Madukkari in Tamil Nadu, Chanda in Maharashtra and Tikaria in UP.

The estimated expenditure on each of the power plants is Rs 600 million.

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