Displaying items by tag: Acquisition

India: Sanghi Industries has appointed Sukuru Ramarao as its chief executive officer (CEO). He succeeds Ravi Sanghi, who was the chair and managing director, following the acquisition of a majority stake in the company by Adani Group subsidiary Ambuja Cements. Sanjay Kumar Khajanchi has been appointed as the chief financial officer, Manish Mistry as company secretary and Ajay Kapur as chair of the company’s board of directors.

Sukuru Ramarao holds over 35 years of professional experience in the building materials sector. He started working for Ambuja Cements in the late 1990s, eventually becoming the company’s chief manufacturing officer in the 2021. He then became the CEO of Adani Group’s cement business in 2023. He holds an undergraduate degree in chemical engineering from the Sri Venkateswara University in Tirupati, Andhra Pradesh.

Sanjay Kumar Khajanchi has worked for Ambuja Cements for over 20 years, reaching the position of Head - Finance & Controlling in 2021. He holds a bachelors degree in commerce from St Xavier's College in Kolkata, qualifications from the International Institute for Management Development in Lausanne, Switzerland, as well as various professional financial accreditations.

Manish Mistry has worked with a wide variety of companies for over 15 years including Bell Ceramics, Alembic Group, Cadila Group and GACL before joining Adani Group in 2022. He is a member of the Institute of Company Secretaries of India and holds a degree in commerce and law from the Maharaja Sayajirao University of Baroda in Vadodara, Gujarat.

Ajay Kapur has been the CEO of Adani Group’s cement business since mid-2022. He has worked for over 25 years in the cement sector, originally starting at Ambuja Cements in 1993. He subsequently became the company’s managing director and CEO from 2014 to 2019. He then was the head of the aluminium and power division at Vedanta Group. Kapur holds an undergraduate degree in economics from St Xavier's College, a master of business administration (MBA) degree from the K J Somaiya Institute of Management and has completed the Advanced Management Programme at The Wharton School of the University of Pennsylvania.

Türkiye: Taiwan Cement Corporation (TCC) has concluded an agreement to acquire an additional 20% stake in OYAK Denizli Çimento from OYAK Çimento. Reuters has reported that this will raise TCC’s stake in the company to 60%. The deal aligns with a previous memorandum of understanding (MoU) between the two parent companies.

OYAK Denizli Çimento operates the 3Mt/yr Honaz cement plant in Denizli Province. It reportedly has an enterprise value of Euro1.4bn. OYAK Çimento bought the business from Eren Holding and Ireland-based CRH for US$400 – 450m in 2014.

Uganda: Holcim subsidiaries Bamburi Cement and Cementia Holding have negotiated a price of US$120m for Hima Cement with buyer Sarrai Group. Business Daily News has reported that the price is 14% higher than the company’s previous valuation. The parties said that the agreed price takes into consideration ‘multiple factors,’ including Hima Cement’s performance in 2022 and forecast performance for 2023.

India: Ambuja Cements has completed its acquisition of a 54% stake in Sanghi Industries for an enterprise value of US$622m. It has funded the purchase through internal accruals. Following the acquisition, Ambuja Cement’s parent company, Adani Group, now has a cement capacity of 75Mt/yr, up by 9% from 69Mt/yr. It has also gained 1Bnt of limestone reserves.

Ambuja Cements said that the transaction would allow it to accelerate its coastal strategy in the west of the country with the aim of reaching a regional cement production capacity of 15Mt/yr. It intends to expand the captive port at the Sanghipuram cement plant to accommodate larger vessels to target markets in Gujarat, Maharashtra, Karnataka and Kerala by 2026. Debottlenecking, fuel mix changes and solar and wind projects are also being considering at the site.

China: China National Building Material (CNBM) plans to rearrange shareholding in Sinoma Cement between its subsidiaries. On 4 December 2023, fellow CNBM subsidiary Sinoma International Engineering agreed to buy US$174m-worth of shares in Sinoma Cement. Upon completion of this, Sinoma International Engineering and New Tianshan Cement will together buy US$975m-worth of shares. Following these subscriptions, Sinoma Cement’s share capital will rise by 67%, to US$436m. New Tianshan Cement’s total stake in the company will be 60%.

The group’s first-half 2023 interim report recorded Sinoma Cement as a 100% subsidiary of New Tianshan Cement.

India: UltraTech Cement has concluded an agreement to acquire Kesoram Cement from Kesoram Industries for US$912m. The Times of India newspaper has reported that the price includes an equity value of US$646m and debt of US$267m. As part of the deal, Kesoram Industries shareholders will gain single shares in UltraTech Cement for every 52 shares they hold in Kesoram Industries.

Kesoram Cement operates two cement plants – the 10.8Mt/yr Vasavadatta plant in Karnataka and the 660,000t/yr Kesoram cement plant in Telangana – and a packing plant in Maharashtra.

Kesoram Industries says that the sale of Kesoram Cement will help it to focus on its chemicals, rayon and transparent paper businesses.

India: UltraTech Cement has bought the 540,000t/yr Patratu grinding plant from Burnpur Cement for US$20.4m. The Hindu Business Line newspaper has reported that the purchase brings UltraTech Cement’s installed cement capacity to 133Mt/yr.

Taiwan Cement Corporation (TCC) has struck a deal to take control of the Türkiye and Portugal-based parts of OYAK’s cement business. The arrangement will see TCC grow its share of the joint-venture business in Türkiye to 60% from 40% at present and it will fully take over the Cimpor joint-venture in Portugal by purchasing OYAK’s 60% stake. Overall TCC is expected to pay around Euro740m for its acquisitions. A final agreement on the deal is expected to be signed in early December 2023.

The proposed deal follows on from when TCC originally spent US$1.1bn towards setting up joint-ventures as a junior partner with OYAK back in 2018. The situation now appears to have reversed with TCC becoming the main owner of the cement business in Türkiye and the sole owner of Cimpor in Portugal. In Türkiye this gives TCC control over the largest cement producer with seven integrated plants, three grinding plants, 47 ready-mixed concrete (RMX) plants, three aggregate quarries and one paper packaging plant. In Portugal (and Cape Verde) this puts TCC in charge of three integrated plants, two inactive grinding plants, 42 RMX plants, 15 quarries, two mortar plants and a cement bag unit.

This contrasts with last week’s news that CRH is buying one cement plant in Texas (with associated assets) for US$2.1bn. TCC is taking control of 10 plants in Türkiye and Portugal for Euro740m. It is not a fair comparison given the woes of the Turkish economy in recent years, prior joint-venture business ownership and so on. Yet it is one more example of the changing nature of cement company ownership around the world since the mid-2010s.

The state of the economy in Türkiye may well be a factor for the change in ownership at OYAK and Cimpor as well as negative exchange rate trends. High inflation has caused problems in recent years, although the government changed its stance on avoiding putting up interest rates following the elections in May 2023. Yet, in a statement about the OYAK deal, chair Nelson Chang said that “companies that do not understand carbon will not survive in the future.” His company is about to spend Euro740m and become the fifth largest cement producer in the world on the assertion that it does understand carbon. Good luck!

Accordingly, the language in the press releases both OYAK and TCC have released is all about sustainable growth and reducing carbon emissions. However, the detail on how exactly they intend to do this is vague. What is clearer though is that OYAK is hoping that TCC invests in energy storage and related industries such as lithium-ion battery additive carbon black in Türkiye. To this end a TCC subsidiary and OYAK are collaborating on a carbon black plant in Iskenderun and further investments may be in the pipeline. TCC and OYAK are also responsible for a couple of calcined clay projects in Sub-Saharan Africa.

Readers may recall that the chair of Chang pronounced in June 2023 that TCC was aiming to diversify the business towards over 50% sales from non-cement sectors by 2025. However, the share from the cement business was around 68% in 2022 and this latest deal with OYAK will likely send it in the ‘wrong’ direction. The company already has a production capacity of around 77Mt/yr from its cement plants in China and Taiwan. Majority ownership of OYAK Çimento and Cimpor Portugal will bump this up to 99Mt/yr and put the company into the top five of the world’s largest cement producers by capacity.

The final question here is what kind of owner TCC intends to be to its growing cement businesses in West Asia and Europe. Publicly at least, it has come across as a backseat investor since 2018 although it has been a minority owner. This has now changed but it will be interesting to observe whether the subsidiaries in the west will be run at arm’s length or more closely and if TCC unifies its global branding and so on. Watch this space.

Türkiye: Taiwan-based Taiwan Cement Corporation (TCC) has signed a preliminary memorandum of understanding (MoU) with OYAK Çimento. Under the MOU, the parties will enter into negotiations over the transfer of a further 20% stake in OYAK Denizli Çimento to TCC. This will raise TCC’s stake in the company to 60%. Reuters has reported the total enterprise value of OYAK Denizli Çimento as US$1.42bn.

India: UltraTech Cement, India’s largest cement producer has commenced negotiations to acquire promoters’ stakes in Kesoram Industries, which sells cement under the Birla Shakti brand. It has two cement plants: Vasavadatta Cement in Sedam, Karnataka, and Kesoram Cement, located in Basantnagar, Telangana. The two plants have a combined cement capacity of 10.8Mt/yr.