Displaying items by tag: India

India: Parth Jindal has been appointed as Managing Director of JSW Cement. He will assume the position in July 2016 and will be assisted by Anil Kumar Pillai as CEO, according the Business Line.

Jindal is the son of Sjjan Jindal, the chairman of JSW Group. The 25-year old has worked previous as an Economic Analyst for JSW Steel amongst other positions in the group. He is also the chief executive of the group's sport company, which owns Bangalore Football Club.

India: Sarat Kumar Jain, vice chairman of Jaiprakash Associates, has resigned from the group with immediate effect. Jain had been associated with the Jaypee Group for over 50 years. The firm said in a statement that the 78 year old had cited health reasons as his reason to resign.

India: Wonder Cement has appointment of Jagdish Chandra Toshniwal as its managing director. Toshniwal takes over from DP Somani who was with the company for over seven years.

Toshniwal originally studied at the Birla Institute of Technology and Science in Pilani. He started his career with Udaipur Cement in 1975 before spending nearly 18 years working for Ambuja Cement. Toshniwal joined Wonder Cement in 2015 as an executive director.

Dalmia Cement (Bharat) threw a spanner in the works of the sale of Lafarge India this week. The cement producer, part of Dalmia Group, appealed against the Competition Commission of India’s (CCI) revised approval of the sale in February 2016. Dalmia challenged the CCI’s approval on procedural grounds querying both the revised and original order for the sale. Subsequently the sale has been delayed until a hearing in May 2016.

Dalmia’s objections concern how the CCI’s original approval in March 2015 interacts with the revised approval given in February 2016. Lafarge India was originally asked by the CCI in February 2015 to sell off 5.2Mt/yr of cement production capacity in Chhattisgarh and Jharkhand in eastern India. The request was a condition to allow the merger of Lafarge and Holcim in the country. Lafarge lined up Birla Corporation to buy the two cement plants but an ambiguous amendment to the Mines and Minerals (Development and Regulation) (MMDR) Act killed the deal. Then Lafarge India, a subsidiary of LafargeHolcim, announced that is was selling all of its assets in India. This includes three cement plants and two grinding stations with a total capacity of around 11Mt/yr.

Dalmia’s appeal may be planned to slow down the sale of a rival in the Indian cement business. Dalmia Group is the fifth largest cement producer in India with a capacity of 14.5Mt/yr. Lafarge India is, to an extent, a lame duck rival whilst the legal wranglings drag on.

However, the appeal may have a more serious side. A statement from the lawyers representing Dalmia also mentioned a challenge against the purchase requirements from the original CCI approval in March 2015. Specifically that any purchaser, “shall not have (directly or indirectly) operational capacity exceeding 5% of the total installed capacity in the relevant geographic market.” The confusion here is where that ‘relevant’ area refers to.

Originally the CCI designated this as Chhattisgarh, Odisha, Jharkhand, Bihar and West Bengal. And unsurprisingly, Dalmia holds more than 5% of production capacity in that region. If the CCI expands the relevant geographic area to more regions of the country then Dalmia’s market share is likely to fall. Local media reported that a bid for the Lafarge India assets by private equity firm KKR, which holds equity in a Dalmia subsidiary, was denied by the CCI. Cue the legal challenge.

It seems unlikely that the appeal by Dalmia will slow the sale down too much. If it is accepted then the CCI will have to reissue its approval for a second time and the sale will be delayed by a few months. If it is denied then the sale will proceed after a delay of one month. Either way the affair demonstrates how prized the Lafarge India assets have become. Indian local media reported that at least nine bids were made. It will be fascinating to see the price the winning bid makes when it is released.

India: Dilip Gaur has replaced K K Maheshwari as the managing director of Grasim Industries, with effect from 1 April 2016. Maheshwari will remain on the board as a non-executive director.

Gaur was previously the deputy-managing director of Ultratech Cement. Before that he worked for Birla Copper, Alexandria Carbon Black and Pan Century Edible Oils. He also worked for over 20 years with Hindustan Unilever. Gaur holds a bachelor of engineering degree in chemicals and took the Advanced Management Program at Harvard, US.

India: Burnpur Cement has signed an agreement with Saurabh Ganguly as a brand ambassador for the company for three years from 11 March 2016. Ganguly was the former captain of the Indian cricket team. As the brand ambassador for the company he will endorse the product and brand of the cement producer to help increase of sales.

India: Ravi Kirpalani will join ThyssenKrupp India on the 14 March 2016 and take charge as the CEO of the Regional Headquarters of ThyssenKrupp India effective from 1 July 2016.

Indian-born, Kirpalani's last role was the Managing Director of Castrol India. Prior to joining ThyssenKrupp, he spent over 16 years at BP where he held a number of roles in India and in the UK. He will provide on-going support for the strategic development of all ThyssenKrupp’s business in India. He succeeds Michael Thiemann, who has been responsible for the region since 1 May 2013 and previously held various management functions at ThyssenKrupp Uhde GmbH over a period of more than 35 years, including member of the Management Board and CEO.

India is currently the third most important market in Asia for ThyssenKrupp. In the 2014 - 15 financial year the group generated sales of around Euro560m in the country and employed almost 6000 people at local companies.

Small print can cause large consequences. Billion US Dollar consequences. Take the 2015 amendment to India’s Mines and Minerals (Development and Regulation) (MMDR) Act from 1957. Ambiguous wording in the legislation may have held up two prominent cement industry acquisitions in 2015. It also hangs over the recently announced purchase by UltraTech Cement of Jaiprakash Associates’ cement plants.

The MMDR was amended in January 2015. As the Times of India explained in mid-2015, a clause in the amendment said, “The transfer of mineral concessions shall be allowed only for concessions which are granted through auction.” However, it was unclear whether this meant historically allocated mines given via nominations or only newly allocated ones. Given the reliance of clinker plants on reliable mineral reserves this caused havoc. Cue confusion and large legal budgets.

LafargeHolcim’s divestment of two cement plants to Birla Corporation was one casualty. As a condition of the merger between Lafarge and Holcim the Competition Commission of India (CCI) required that the Jojobera and Sonadih cement plants in Eastern India be sold in 2015. Together the plants have a combined cement production capacity of 5.1Mt/yr. However the ambiguity over the 2015 MMDR Act clause on transfer of mining rights held the deal up. By February 2016 Birla Corporation had endured enough. It publicly complained about Lafarge India’s ‘inability’ to complete the deal and threatened legal action. LafargeHolcim retorted by asking the CCI if it could sell all of Lafarge India instead. It received the revised clearance and a new buyer is yet to be announced.

Another victim was UltraTech Cement in a previous attempt to buy Jaiprakash Associates’ cement assets. That time it was down to buy two integrated cement plants in Madhya Pradesh with a combined clinker production capacity of 5.2Mt/yr with associated mineral rights. The deal was agreed in December 2014 and then reported delayed in mid-2015. Finally, on 28 February 2016 the Bombay High Court rejected the deal, citing the MMDR Act as the prime cause.

Luckily for UltraTech Cement the story has a happy ending (so far) as it then announced that it was purchasing the majority of Jaiprakash Associates’ 22.4Mt/yr cement portfolio instead for US$2.4bn. It is hoped that the deal will be finalised by June 2017 but this partly depends on the MMDR Act being amended. Although UltraTech Cement have said they are looking at alternative routes to the deal in case the act isn’t amended.

Poor legal wording kiboshed at least two cement industry deals for over 10Mt/yr production capacity. Roughly, at the price UltraTech Cement is paying for its latest deal, that’s over US$1bn worth of Indian cement assets. Given the hard time the Indian cement industry had in 2015 the question should be asked regarding how much damage the MMDR Act amendment has done. One option for the beleaguered industry is to consolidate and cut its costs. This was massively delayed in 2015.

The proposed 2016 amendment to the MMDR Act reads as follows:

“Provided that where a mining lease has been granted otherwise than through auction and where mineral from such mining lease is being used for captive purpose, such mining lease will be permitted to be transferred subject to compliance with the terms and conditions as prescribed by the Central Government in this behalf.”

Let’s hope it does the trick this time.

India: Shailendra Chouksey, a director of JK Lakshmi Cement, has been appointed as the new president of the Cement Manufacturers' Association (CMA) for a two year term. He replaces OP Puranmalka, the managing director of Ultratech Cement. Previously Chouksey was the vice-president of the association.

"As the newly elected president of the CMA, my priority is to device methods to work with different stakeholders, including the government of India to spur the cement demand," said Chouksey.

Chouksey holds a PhD in managerial economics, an MBA in marketing from the Faculty of Management Studies, Delhi and a post-graduate degree in physics. He has worked in the cement industry for nearly 40 years.

India: Martin Kriegner will be appointed Head of India for LafargeHolcim, effective on 1 March 2016. He will report to Eric Olsen, Group CEO and succeed Bernard Terver who has decided to retire. Kriegner is currently the Area Manager Central Europe,

Kriegner, an Austrian national, joined LafargeHolcim in 1990 and has previously held several senior leadership positions in the Group, including CFO and CEO of the Group operations in Austria as well as Head of Lafarge India and Regional President Cement for Asia. He graduated from Vienna University with a Doctorate in Law and obtained an MBA at the University of Economics in Vienna.

Bernard Terver joined the Group in 1994 and became member of the Senior Management in 2012. He was responsible for Ambuja Cements and ACC in India since 2014 and was appointed Head of India at LafargeHolcim following the merger.