Displaying items by tag: Acquisition

India: JK Cement has entered a joint venture with Saifco Cement, through which it will expand its offering in northern India. JK Cement will acquire a 60% stake in Saifco Cement for US$20.1m to expand in Jammu and Kashmir, where Saifco owns limestone reserves of 129Mt across 144 hectares. The acquisition will involve both the companies working together to increase the capacity of cement production by leveraging the expanse of the limestone reserves in the next five years, according to a press release.

JK Cement CEO Madhav Singhania said "Cement demand typically leads economic expansion by a factor of 1.2 in regions with significant infrastructural development opportunities, and Kashmir is undoubtedly one of these regions."

Consolidation in the Indian cement sector continued through December 2024. UltraTech Cement completed its acquisition of a larger stake in The India Cements late in the month. Then, this week, Nuvoco Vistas said that it was preparing to buy Vadraj Cement. Along similar lines, JK Lakshmi Cement also confirmed that it was moving ahead with the merger of its cement-related subsidiaries.

The UltraTech Cement deal was approved by its board of directors in July 2024 but it took until 24 December 2024 before it formally completed the purchase of an additional 33% stake in The India Cements. The deal was valued at around US$460m in mid-2024 by local press. UltraTech Cement now owns just under a 55% stake in the company and is its majority shareholder. Back in July 2024 UltraTech Cement said that The India Cements had a total production capacity of around 14.5Mt/yr of ordinary Portland cement (OPC). Just under 13Mt/yr of this is based in the south of the country, mostly in Tamil Nadu, and 1.5Mt/yr is in Rajasthan.

The Nuvoco Vistas announcement follows a bidding process to acquire Vadraj Cement through a corporate insolvency process. Key parts of the deal include taking control of Vadraj Cement’s 6Mt/yr grinding plant in Surat and its 3.5Mt/yr integrated plant in Kutch. Both plants are in Gujarat. The agreement also includes limestone mining rights in the state and a captive jetty near the Kutch plant. However, the expression of interest for the insolvency proceedings, published in March 2024, revealed that the company’s operations have been suspended for five years. The grinding plant and the jetty were described as ‘partially constructed.’ Nuvoco Vistas has not disclosed how much it had bid to pay for the company, although it was keener in its press release to state that the transaction would see it become the fifth largest cement producer in India. It says that its cement production capacity will rise to 31Mt/yr; 19Mt/yr of this in the east, 6Mt/yr in the north and 6Mt/yr in the west. Synergies are also hoped for when the new assets are combined with Nuvoco Vistas’ current plants at Nimbol and Chittorgarh in Rajasthan.

Compared to the previous two news stories, the JK Lakshmi Cement merger plan is on a smaller scale but it follows the same trend. The cement producer presented its corporate restructuring plan to its shareholders in July 2024. It wants to merge JK Lakshmi Cement, its main cement company, with Udaipur Cement, Hidrive and Hansdeep. JK Lakshmi Cement runs two integrated cement plants at Sirohi, Rajasthan, and Durg, Chattisgarh respectively. It also operates what it calls ‘split location grinding’ plants at Kalol and Surat in Gujarat, at Jhamri in Haryana and at Cuttack in Odisha. Udaipur Cement operates one integrated plant in Rajasthan, Hidrive owns land next to the group’s Surat unit and Hansdeep is a preferred bidder for limestone resources in Nagaur, Rajasthan. The group’s clinker and cement production capacities are 10Mt/yr and 16.4Mt/yr. Its rationale is to gain synergies from production, distribution and logistics, to simplify the corporate structure, to improve efficiency and to raise shareholder value. That last one might be particularly useful for a cement producer looking to expand or sell in the future.

Further mergers and acquisitions are expected to happen in 2025 but at a slower rate than in 2024. Part of the dynamic so far has been that the highest demand is in the east and the highest capacity is in the south. Many of the deals announced in 2024 focused on markets in the south of the country. By contrast, analysts quoted in the Economic Times at the start of 2025 anticipate that new transactions might start to move to other regions. Obvious potential targets include Jaiprakash Associates and Heidelberg Materials. The first company became insolvent in 2024 and is likely to be sold off. Rumours of a potential purchase of the second company by Adani Group in the autumn hit the local press in October 2024. Doubtless there are other less visible possibilities too if the price is right. Read Global Cement Weekly in 2025 to find out what happens.

India: Nuvoco Vistas has won a bidding process to acquire Vadraj Cement through a corporate insolvency resolution, according to The Economic Times. The acquisition includes Vadraj’s 6Mt/yr grinding unit in Surat and 3.5Mt/yr clinker capacity in Kutch, increasing Nuvoco Vista’s production capacity of 25Mt/yr by over 20%. The value of the deal was not disclosed.

Nuvoco will acquire Vadraj Cement through its subsidiary Vanya Corporation, which was incorporated in November 2024. The company said that it plans to fund the acquisition without a significant rise in its consolidated debt levels. It plans to invest in Vadraj Cement over 15 months to bring in operational improvements before commencing production in the third quarter of the 2027 financial year. The acquisition awaits National Company Law Tribunal approval.

The company stated in its press release “With this transaction, Nuvoco's total cement production capacity is set to increase to approximately 31Mt/yr, distributed as 19Mt/yr in the East, 6Mt/yr in the North, and 6Mt/yr in the West, consolidating its position as the fifth-largest cement group in India.”

India: UltraTech Cement has acquired an 8.69% stake in Star Cement for US$99m, at US$2.74/share. According to The Hindu Businessline, this minority stake acquisition could lead to UltraTech Cement eventually buying out Star Cement entirely, similar to its previous acquisition of India Cements on 20 December 2024.

Brazil: China-based Huaxin Cement has signed a deal worth US$187m to buy aggregates producer Embu. Embu owns four quarries in the metropolitan region of São Paulo with a production capacity of nearly 9Mt/yr, according to the Rio Times newspaper. In 2023 it produced 6.3Mt and reported a net profit of around US$3.2m.

Typical! We published a cement sector news review for 2024 in the December 2024 issue of Global Cement Magazine and a load of big important events happened afterwards. So, here is a roundup of some of the major stories that have taken place in the last two months of the year.

The TL:DR (too long; didn't read) version of ‘Global Cement News in 2024’ was: focus on the US market by the multinationals; cement joining the emissions trading scheme in China as the world’s largest market stagnates; continued rivalry between UltraTech Cement and Adani Group in India as that sector grows; markets in the Middle East and North Africa adjusting to higher exports; the drawn out divestment of InterCement in Brazil; lots of new plants in Sub-Saharan Africa reflecting demographic trends; and an emphasis on construction and demolition materials in Europe but one on aggregates in North America.

However, from November 2024 onwards… Donald Trump was re-elected as President in the US, Quikrete put in an US$11.5bn deal to buy Summit Materials, the United Nations Climate Change Conference (COP29) in Azerbaijan ended in acrimony, Gautam Adani was accused of fraud by a US court and Huaxin Cement said it was buying Holcim’s majority stake in Lafarge Africa for US$1bn. These have all been covered in previous editions of Global Cement Weekly. Check them out for more information. One can tell it’s been a busy tail-end to the year though when a US$600m agreement by Heidelberg Materials North America to buy Giant Cement Holding did not make the top five, admittedly selective, noteworthy news stories of the last two months of 2024. These stories also, roughly, followed the trends highlighted in the ‘Global Cement News in 2024’ article.

To reflect on the Adani story a few weeks later, nothing much seems to have occurred. Yet. The share price of various Adani Group companies fell when the US authorities made the announcement in late November 2024 but they have mostly regained much of their value since then. The consensus by Reuters, this week, was that the US prosecutors have a strong case backed up by documentation but extradition seems unlikely. Adani himself has made public appearances in India since the allegations surfaced. One minor consequence has been that Gautam Adani exited the US$100bn Bloomberg Billionaires Index in 2024. This is likely to have been caused, in part at least, by the allegations from Hindenburg Research in 2023 and the current legal problems from the US bringing down share prices. On the cement side of Adani Group it appears to have been business as usual so far. A large-scale investment in Rajasthan was announced in December 2024 and, this week, plans to merge subsidiaries Sanghi Industries and Penna Cement with Ambuja Cements were disclosed.

Another general trend that we haven’t covered much online have been changes in the Australian market. Last week, Cement Australia, a joint venture between Heidelberg Materials Australia and Holcim Australia, said it was acquiring the cementitious division of the Buckeridge Group of Companies (BGC) for US$800m. This follows CRH’s purchase of a majority stake in AdBri that was approved by the latter’s shareholders over the summer. Around the same time, Seven Group Holdings completed its acquisition of the remaining 28% stake in Boral that it did not already own. For more on the situation in Australia and New Zealand read the article in the January 2025 issue of Global Cement Magazine.

That’s it for 2024. Unless another massive news story in the cement sector gets announced in the next week-and-a-half.

Global Cement Weekly will return on Wednesday 8 January 2025

India: Ambuja Cements will merge its recently acquired companies, Sanghi Industries and Penna Cement Industries. Ambuja Cements purchased Sanghi Industries in December 2023 and Penna Cement in August 2024. Ambuja Cements holds a 58% share in Sanghi Industries and 99.94% share in Penna Cement. The transaction is expected to be completed within 9-12 months, according to the Deccan Herald.

US: Eagle Materials Inc, has announced it has entered into a definitive agreement to acquire Bullskin Stone & Lime, an aggregates business located in Western Pennsylvania. The business serves the Pittsburgh and broader Western Pennsylvania markets. The purchase price is US$152.5m, subject to customary post-closing adjustments. The transaction is expected to close by mid-February 2025, subject to the satisfaction of customary closing conditions.

Commenting on the acquisition, Michael Haack, President and CEO, said “The acquisition of Bullskin Stone & Lime further advances Eagle’s long-term growth strategy by adding a pure-play aggregates business that complements and extends our network of aggregates quarries and cement plants and terminals in the region.”

Australia: Cement Australia, a joint venture between Heidelberg Materials Australia and Holcim Australia, will acquire the cementitious division of the Buckeridge Group of Companies (BGC) in Perth for US$800m, according to The Australian. The acquisition includes a cement grinding unit with ‘significant’ capacities, along with operations in cement, concrete, quarry, asphalt, transport and a materials technology centre. Cement Australia reportedly ‘fended off competition’ from Boral, Adbri and Mass Group in the process. BGC has stated that it retains a ‘significant’ business with about 1000 employees across its other sectors. The acquisition remains subject to regulatory approval, but is expected to close in the second half of 2025.

India: Star Cement has said that it plans to expand its capacity by an additional 2Mt/yr through a greenfield project in Silchar at a cost of US$47.2m. The expansion is expected to be completed within the next two years.

This announcement comes after Star Cement dismissed reports suggesting that Adani Group subsidiary Ambuja Cement had entered talks to acquire the company, as part of its strategy to expand its presence in the Northeast. According to the Economic Times, Star Cement labelled the claims as ‘speculative’ and clarified that ‘no such discussions are underway.’

Sanjay Agarwal, joint managing director of Star Cement, said “At a time when the building materials sector is growing, we are not looking to exit this business.”

Star Cement has a total installed production capacity of 7.7Mt/yr. Its operations include a 1.67Mt/yr integrated cement plant in Meghalaya and four grinding units.