Despite ongoing uncertainty over demand and fears of surplus capacity depressing prices, ACC Ltd., India's foremost manufacturer of cement, has decided to invest Rs 1,600 crore in 2009 and another Rs 1,300 crore next year.

The company officials unveiled the investment plans at the 73rd annual general meeting in Mumbai on Wednesday. ACC stated in a communiqué that it will enhance capacity at Bargarh plant to 2.3 million tonnes (mt) with a 30 MW captive power plant, which is expected to complete by mid-2009.

In addition, the company is also setting up two greenfield grinding plants in Karnataka which would go on steam by the end of the year.

The company intends to raise a major portion of the funding for the projects through internal accruals. The company has a reserve and surplus of Rs 4,636 crore as on December 31, 2008.

Last year, ACC produced 20.83 million tonnes of cement, up by 4.6 per cent over 2007 figures and increased its market share to 12.2 per cent in 2008, compared from 11.8 per cent of previous fiscal.