Displaying items by tag: India
India: JSW Cement has inaugurated a 6.5km railway siding to its 2.4Mt/yr Salboni cement grinding plant in West Bengal. The railway siding will connect the unit to the main railway line between Godapiasal and Salboni, according to the Economic Times newspaper. The new connection is expected to reduce logistics costs at the site.
The rail yard at the plant has five lines running parallel and connected to each other. Two lines are designated for receiving raw materials, two lines are dedicated for cement loading and the fifth line is reserved for engine reversal. The plant initially intends to receive two rakes of raw materials per day and one rake per day of cement for despatch.
UltraTech wins legal case against fake cement brand
05 June 2018India: UltraTech Cement has won a copyright case against a company selling cement brands similar to its own. The cement producer argued at the Bombay High Court that Everest Industries was selling products that were using marks deceptively similar to its own registered mark ‘UltraTech,’ according to the Mint business newspaper. UltraTech said that Everest was using the mark ‘Ultratruf-The Builders Choice’ with similar fonts and colours to its own mark. The court also observed that Everest was deceptively using another brand name, ‘Ambruja’, similar to that of Ambuja Cements.
The court ordered Everest Industries not to use the mark in any manner in mid-May 2018. It also asked it to pay costs and damages.
Indian police raid counterfeit cement plant in Patna
04 June 2018India: Police have arrested the owner of a factory near Gaurichak in Bihar manufacturing counterfeit cement. Over 5000 bags of cement were seized, according to the Telegraph of India newspaper. Cement bags falsely branded as Birla Gold, Lafarge and other companies were found at the site. Packaging machines were also impounded. Police said the unit was collecting expired bags of cement and reusing them. The investigation will now move on to finding contractors who have been selling the fake products.
India: Orient Cement has cancelled a deal to buy three cement plants from Jaiprakash Associates. The companies signed an agreement in May 2017 to buy a 74% stake in Bhilai Jaypee Cement for US$225m and the acquisition of the Nigrie cement grinding plant in Singrauli, Madhya Pradesh from Jaiprakash Power Ventures for US$77m. Orient Cement said that the terms of the agreement allowed either party to terminate it if it did not complete within 12 months.
Bhilai Jaypee Cement, a joint venture between Jaiprakash Associates and the Steel Authority of India Limited (SAIL), has a 2.2Mt/yr integrated Portland slag cement plant in Satna Madhya, Madhya Pradesh and a grinding plant in Bhilai, Chhattisgarh.
India: Binani Cement's committee of creditors (COC) has accepted a bid by UltraTech Cement. The COC will now submit UltraTech Cement’s plan to the National Company Law Tribunal (NCLT) for approval, according to the Times of India newspaper. However, the Supreme Court is also looking at the case following a petition by rival bidder Dalmia Bharat.
UltraTech Cement made a direct bid of US$1.12bn for the bankrupt Binani Cement following an auction in March 2018 that was originally won by Dalmia Bharat. Dalmia Bharat has disputed UltraTech Cement’s offer and the two companies have conducted legal campaigns to reinforce their respective claims.
India: Grasim Industries plans to invest up to US$870m in its cement business by the end of 2021. The subsidiary of Aditya Birla that also operates UltraTech Cement, wants to modernise its existing cement plants, carry out environmental upgrades and increase the production capacity of the units it acquired from Jaiprakash Associates, according to the Mint newspaper.
Aditya Birla Group’s chief financial officer Sushil Agarwal said that the company wants to increase the capacity utilisation rate of the former Jaiprakash Associates cement plants to over 85%, the standard level for the other UltraTech Cement plants. He added that on average cement plants in India have a capacity utilisation rate of 75%.
UltraTech Cement’s deal to buy the cement business of Century Textiles & Industries could see it become the world’s third largest cement producer by production capacity outside of China.
It announced this week that it had entered into an acquisition agreement to buy the cement subsidiary of BK Birla Group for US$1.26bn. If the deal completes then it will gain three integrated plants in Madhya Pradesh, Chhattisgarh and Maharashtra respectively with a combined production capacity of 11.4Mt/yr and a 1Mt/yr grinding plant in West Bengal. At this point UltraTech Cement will increase its production capacity to 106Mt/yr seeing it become the third largest cement producer in the world in Global Cement’s Top 100 Report.
This latest deal is subject to the usual regulatory approval from competition bodies and the like. Bustling past this step seems far from clear at this stage given that UltraTech Cement owns cement plants already in each of the four states the proposed purchases are in. It has described the purchase as giving it, …”the opportunity for further strengthening its presence in the highly fragmented, competitive and fast growing East and Central markets and extending its footprint in the Western and Southern markets.” Synergy savings from procurement and logistics are expected to follow with further benefits to be gained from the company’s distribution network. Local and national competitors may not see it the same way and the fallout from a price war could be damaging for smaller producers.
As covered previously, UltraTech Cement seems hell bent on winning its on-going fight against Dalmia Bharat to buy Binani Cement. Rightly or wrongly UltraTech Cement tried to muscle its way into buying Binani by making a bid directly to its owners after it lost an auction for it. Legal wrangling has followed as the insolvency process for Binani Cement has clashed against the auction process of the administrator. At the time of writing it is still far from clear which company will win.
Comparing the prices of the two latest acquisition targets by UltraTech Cement may offer some insight of its motivations. The Binani Cement assets roll in at just over US$125/t of production capacity. Although, as noted below, some of this is located outside of India. The Century Textiles & Industries assets are being purchased for a little over US$100/t. This is interesting as it is lower that the Binani cost, although the close links between BK Birla Group and UltraTech Cement’s owner Aditya Birla may help to explain this.
UltraTech Cement’s milestone as it surpasses the 100Mt/yr capacity level will mark a continuing change in the world’s cement industry as it moves away from Europe and North America to developing economies. As ever the classification is a bit of a fudge given that Global Cement’s top producers list excludes Chinese producers. Partly this arises from the difficulty obtaining reliable data on the Chinese industry. Partly this comes from top producer’s list looking at multinational companies over (extremely) large national ones. Due to this UltraTech Cement remains a regional player. Or it will at least until it (or if it) manages to buy Binani Cement. Some of the assets included in that sale include plants in both the UAE and China. At this point UltraTech Cement’s claim to be the third biggest cement producer in the world will be secure.
India: Larsen & Toubro has won an order to build cement plants in Odisha and Andhra Pradesh. The end client has not been named and no value has been disclosed. The cement plant orders were announced as part of a wider set of orders worth over US$590m, including government construction projects.
India: UltraTech Cement has agreed an acquisition schedule to buy the cement assets of Century Textiles & Industries. The cement production subsidiary of BK Birla Group comprises three integrated plants in Madhya Pradesh, Chhattisgarh and Maharashtra respectively with a combined production capacity of 11.4Mt/yr and a 1Mt/yr grinding plant in West Bengal.
The takeover has been arranged via a demerger process whereby Century Textiles’ shareholders will be given shares in UltraTech Cement. The deal is subject to approval from shareholders, creditors, competition bodies and others. It is expected to be completed by early 2019.
India: UltraTech Cement has won the Deora-Sitapuri-Udipyapura limestone mining block in Madhya Pradesh in a state auction. The block has a reserve of around 54Mt and it is spread over an area of 345 hectares. The company said that the block is near to the existing limestone quarry of its recently commissioned Dhar Cement plant. It added that the new limestone reserve would be useful in augmenting the capacity of the plant in the future.