Displaying items by tag: Jaiprakash Associates
Aditya Birla revives Jaypee deal
24 October 2012India: Business conglomerate Aditya Birla Group has revived negotiations to purchase cement manufacturer Jaiprakash Associates' cement plants in Gujarat and Andhra Pradesh.
Aditya Birla is reported to have made an offer of up to US$130/t to buy the cement assets of Jaiprakash Associates which have an overall capacity of 9.8Mt. This follows Irish building materials firm CRH decision to cancel talks with Jaiprakash Associates in early October 2012. In August 2012 CRH was reportedly close to buying a 51% equity stake in the Indian cement producer's plants in Gujarat. Top officials from Aditya Birla's cement business and executives from foreign lender Barclays Bank are in talks to finalise the pricing of the deal.
India fines cement firms US$1.1bn over cartel
22 June 2012India: In one of the largest fines of its kind, India's antitrust body has imposed a penalty of a combined US$1.1bn on 11 cement companies for price fixing. The companies penalised by the Competition Commission of India (CCI) include ACC and Ambuja Cements (both units of Swiss cement-maker Holcim), UltraTech Cement, Jaiprakash Associates, India Cements, Madras Cements and the local unit of France's Lafarge.
"The commission has found that the cement companies have not utilised the available capacity, so as to reduce supplies and raise prices in times of higher demand," said the CCI in its judgement. It said that the penalty on each company amounted to 50% of their profit for the financial years 2009-10 and 2010-11.
ACC has been fined US$201m and Ambuja has to pay US$204m. India's largest producer of the building material, Ultratech Cement, has to pay US$206m, while Lafarge's Indian unit will have to shell out US$84m. Jaiprakash Associates has been fined US$232m.
On 21 June 2012 the CCI said that the cement companies' action of limiting supplies to the market through an 'anti-competitive agreement' was not only detrimental to consumers but also to the economy, as the building material is a critical input for infrastructure projects. The regulator asked the companies to pay the fine within 90 days. The companies can challenge the regulator's orders in the Competition Appellate Tribunal, a quasi-judicial body and can then appeal to India's Supreme Court.
In response UltraTech said that it hasn't indulged in any cartelisation and that it would appeal against the order in the appellate tribunal. In Zurich Holcim said it would, "contest the allegations and findings against (ACC and Ambuja) in the order and will pursue all available legal steps to defend their respective positions." In Paris Lafarge said, "We will see the detailed report and decide the suitable actions to take. Lafarge has a strict policy to comply with competition laws."
The CCI started accepting cases in 2009, replacing a relatively toothless antitrust body that had been in place since 1970, and has been becoming increasingly assertive. The biggest penalty it had imposed so far was in 2011, when it ordered DLF Ltd., India's biggest property developer by sales, to pay US$120m for abusing its dominant market position by changing agreements signed with some property buyers.
The judgement comes at a bad time for cement companies, as demand for construction materials is weak due to sluggish economic growth and a fall in spending on infrastructure projects. The cost of raw materials such as coal is on the rise as well, pressuring margins.
Jaypee under the hammer
18 June 2012India: India's biggest cement producer, Jaiprakash Associates, says that it is planning to sell its cement units in Gujarat and Andhra Pradesh as a part of its divestment plan. In a move that is very similar to those of debt-ridden European and North American cement producers, local media has reported that Jaiprakash has been in talks with at least two different investors, including domestic group Aditya Birla and Lafarge from France. It is looking to sell its 'Jaypee Cement' unit plants, which are already run as a separate company.
Birla and Lafarge have finished their first round of talks with Jaypee. Final bids will be completed in two months. Jaypee wants to exit the cement production business in order to focus on its core activities.
Earlier, it was also reported that Switzerland's multinational Holcim Ltd. was prepared to spend up to US$1.6bn on the three plants, which have a joint capacity of 9.8Mt/yr.
Environment Ministry clears Jaiprakash expansion
02 September 2011India: A panel of India's environment ministry has cleared a USD98.6m proposal by Jaiprakash Associates to expand the capacity of its cement plant in Madhya Pradesh. The panel has recommended clearance, with certain riders, for the project in the Sidhi district, where the company already operates a 2Mt/yr plant. The Jaypee Group firm proposes to augment the existing capacity to 3.5Mt/yr by constructing a 1.5Mt/yr line.
The Expert Appraisal Committee (EAC) recommended the proposal for environmental clearance subject to the stipulation of specific conditions that include developing a green belt in at least 33% of the area in and around the plant and earmarking at least 5% of the total cost of the project towards social commitments. Jaiprakash plans to put up the new line on 10 hectares and has plans to invest USD13.1m for the installation of pollution control measures.
The Jaypee Group has over 26Mt/yr of cement production capacity across all of its cement interests and has embarked upon expanding it to around 36Mt/yr.