An investment to the tune of Rs 300 crore will be made by the Reliance Cement Private Ltd, a subsidiary of the Reliance Natural Resource Ltd.

Sources said contrary to the arm-twisting tactics adopted by the Mayawati government in case of allotment of land for the Rail coach factory at Rai Bareli, the government’s approach for the cement project is quite positive.

Reliance is in touch with the UP State Industrial Development Corporation for acquiring the land for developing industrial estates and also for individual projects. Sources said the process of land acquisition is likely to be completed in a few months’ time after Reliance selects a site.

This will be the second major private sector investment in cement in UP after Jai Prakash Industries acquired the UP Cements Corporation plant in Sonbhadra district for Rs 400 crore in 2005. The JP group acquired the plant following the auction conducted by the liquidator appointed by the Allahabad High Court for disposing the assets of the defunct public sector unit.

The Reliance cement plant will essentially be a cement grinding unit which will source clinker from the integrated cement plant of Reliance at Satna in Madhya Pradesh while the fly ash would come from the 1,200 MW coal-based thermal power plant of Reliance proposed to come up at Roja in Shahjahanpur district. The first unit of 600 MW capacity is targeted to be commissioned by October 2010.

In October 2007, ADAG Reliance had stepped into the cement business in a big way by incorporating a new arm, Reliance Cement, to set up four cement plants of 5 million MT capacity, each with a total investment of Rs 10,000 crore.

Sources said a team of Reliance had recently visited several places in UP to find a suitable location for the plant which should be near a railhead. The sites included the one on the Kanpur- Allahabad road, Panki in Kanpur, Rai Bareli and Unnao.

Sources said the decision by Reliance to invest in UP is final and only the location of the plant remains to be finalised. Reliance needs a cement plant to dispose the fly ash to be generated from the coal-based Roja thermal power plant.