Chairman Pallonji S Mistry told shareholders at the company's 63rd annual general meeting held at Birla Matushri Auditorium in Mumbai that despatches were higher at 2.57 million tonnes in the first three months, as against 2.10 million tonnes in the same period last fiscal.

"The higher despatches were despite a major breakdown at the Kymore clinkering plant, which resulted in the plant being shut for over a month. I am glad to report that the plant is now functioning normally, Mistry said.

"The robust growth however augurs well for the industry and if similar trends continue after the monsoons, the industry could end up seeing a double digit growth rates for the year," Mistry added.

Notwithstanding the growth in despatches, cement prices continue to remain flat with realisation falling below last year's levels. "While volumes have definitelyshown remarkable improvement in the first quarter, the same has not had a favourable impact on the cement prices across the board. The overall prices so far are still lower as compared to the prices during the corresponding period of the previous year," Mistry said.

The ACC chairman was, however, optimistic that the prices, which took a severe beating in the last three years, may look up in the coming months of the current fiscal.

According to Mistry, the company's Rs 187 crore rights issue, which opened for subscription on Wednesday, will part-fund the company's plan to become a 15 million tonne cement company in the next two years. ACC has announced a Rs 750 crore modernisation cum expansion programme so as to maintain its lead in the cement industry. Larsen & Toubro has already caught up with ACC, in terms of capacity at 12 million tonnes, by taking over the Gujarat-based Narmada Cement. ACC has a marketshare of 12 per cent.

Besides capacity addition at its Wadi plant, ACC is also exploring theacquisition route to add another three million tonnes over the next two years.

During 1998-99, the cement industry was adversely affected due to a supply overhang fresh capacities of 8.5 million tonnes coming up. "With not much of capacity addition expected in the current year, there is reason to be hopeful that prices may look up. Even if capacity increases by two million tonnes and demand grows by 10 per cent, we will be faced with a situation where supply may quite match the demand," Mistry said.

The ACC chairman told shareholders that the review of non-core businesses has already commenced and the stake-sale in International Ferrites was a step in that direction. The process, which looks at concentrating on businesses that add value, will gain momentum in the coming months.

Shareholders on Wednesday approved the company's plans to raise Rs 100 crore through issue of preference shares and increase authorised capital from Rs 225 crore to Rs 325 crore. The company has, however, not divulged the detailsof the preference share issue.