Displaying items by tag: India

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.

India: Production has resumed at the 3Mt/yr JK Cement plant in Baglakot, Karnataka. It was temporality stopped following the sudden caving-in of the clinker silo roof in January 2016.

"Production of clinker and cement has resumed with operation of the kiln by making an alternate arrangement using two belts conveyors for feeding the clinker directly to the cement mill," said the company in a statement.

While production was suspended the company has been supplying the market using supplies at its depots. Normal levels of production are expected to be achieved by late February 2016. The clinker silo is expected to be repaired within six months.

India: Reliance Infrastructure has sold its cement business to Birla Corporation for US$709m to lower its debt. The transaction is subject to approval of the Competition Commission of India and other applicable regulatory approvals," the company said.

"Reliance Infrastructure today announced the signing of share purchase agreement with Birla Corporation Limited, the flagship Company of the M P Birla Group, in relation to 100% sale of its subsidiary RCCPL," the company said in a statement. It added that SBI Capital Markets acted as the financial advisors to Reliance Infrastructure for this transaction.

Reliance Infrastructure has an integrated cement production capacity of 5.08Mt/yr at Maihar, Madhya Pradesh and Kundanganj, Uttar Pradesh and a 0.5Mt/yr cement grinding unit at Butibori, Maharashtra. The deal was valued at US$140/t of cement production capacity.

India: Kakatiya Cement Sugar & Industries has appointed Shri P Veeraiah as its chairman and managing director effective from 3 February 2016. He was previously the joint managing director of the company. The appointment has been made following the death of Shri P Venkateswarlu. It is subject to the approval of shareholders, which is expected to be obtained at the next annual general meeting.

India: LafargeHolcim has confirmed that it is considering selling its subsidiary Lafarge India. The sale will require the approval of the Competition Commission of India (CCI) as an alternate remedy for the merger of the Group's legacy companies. Lafarge India has a cement production capacity of 11Mt/yr.

The announcement follows a regulatory filing by Birla Corporation stating that is considering taking legal action against LafargeHolcim for stopping a previous deal. However, LafargeHolcim has not said why it terminated the deal with Birla Corporation.

Originally LafargeHolcim was in discussion with Birla Corporation for the sale of the Jojobera and Sonadih cement plants in Eastern India that was previously announced. Both plants had a combined cement production capacity of 5.1Mt/yr. Due to the current regulatory issues relating to the transfer of mining rights captive and critical to the two plants, LafargeHolcim was obliged to submit an alternate remedy to the CCI to ensure compliance with the order.

LafargeHolcim now says that an 'alternate remedy' is under consideration by the CCI.

India: Birla Corporation said it will take legal action against Lafarge India over the firm's 'inability' to go ahead with the deal to sell its Jojobera and Sonadih cement plants. In August 2015 both firms signed an agreement, through which Birla Corporation was to acquire Jojobera and Sonadih cement businesses from Lafarge India for US$734m.

"Lafarge India has since informed its inability to proceed with the agreement. The company has since discussed the matter with its legal advisors and has decided not to accept its contention and is in the process of taking appropriate legal measures in consultation with lawyers," said Birla Corporation in a regulatory filing. The firm did not specify reasons behind Lafarge India expressing its inability to complete the deal.

Birla Corp was to acquire Lafarge India's cement business, which comprises an integrated cement unit at Sonadih, Chhattisgarh, a cement grinding unit at Jojobera, Jharkhand along with Concreto and PSC brands. The acquisition would have added an additional cement capacity of 5.15Mt/yr to Birla Corp and would have helped the firm consolidate its position in the eastern India cement market. The company has a total operational cement capacity of about 10Mt/yr with plants in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.

India: Kiran Global Chems has launched Geocement, an environmentally-friendly branded cement. The company claims that the product is stronger than Ordinary Portland Cement and that it does not require water for mixing or curing, according to local media.

Geocement is made from Geopowder and Geobinder, other products also made by Kiran Global Chems. Geopowder uses industrial by-products such as fly ash, rice husk ash, slag, activated clay and alumina. At construction sites it can be mixed with the company's proprietary Geobinder liquid and aggregates to make concrete. The company claims that Geocement does not require water curing and attains maximum strength within seven hours. Kiran Global Chems has also launched Geocrete, a Geocement concrete made with its powder and binder for various industrial applications.

"We have started distributing this to the bulk customers, such as builders and now we are launching the brand for retail. We are planning to sell it through e-commerce," said M S Jain, chairman of Kiran Global Chems. The price of Geocement will be slightly higher than normal cement, but it promises lower finished building cost and less construction time and labour. The company intends to target southern Indian states in 2016.

Kiran Global is also preparing a US$29m expansion programme to set up 12 Geobinder units, 12 Geopowder plants, two precast concrete units and four grinding units across the country. The expansion, is intended to cut logistics cost, will result in 4Mt of capacity with a potential turnover of up to US$300m by the 2018 – 2019 financial year. The company has an in-house research and development centre, accredited by the Union Ministry of Science and Technology, and has been conducting geopolymer research in collaboration with leading research institutes.

India: Ultratech Cement has reported a 37% rise in its net profit to US$83m for the quarter that ended on December 2015. It attributed the growth to lower operating costs and higher sales. The subsidiary of Aditya Birla Group reported a net profit of US$59m in the same period of the 2014 – 2015 financial year.

The company's total income rose by 4% year-on-year to US$910m from US$875m. Grey cement sales rose by 7% to 11.26Mt/yr from 10.51Mt.

"Though cement prices remained subdued, the performance during the quarter was encouraging, driven by operational efficiencies, judicious fuel mix and lower energy costs. This has resulted in lower operating costs," Ultratech said in a statement. However, this benefit was partially offset by rise in costs due to District Mineral Foundation levy in terms of the provisions of the Mines and Minerals (Development) Amendment Act, 2015 and amendment to the Payment of Bonus Act.

India: Sagar Cements is in advanced talks to buy Jaypee Group's Andhra Cements. JSW Cement is another potential contender. The enterprise value of the deal is expected to be around US$162 – 169m, a steep discount of about 30% in comparison with recent cement deals.

Andhra Cements has two plants in Andhra Pradesh with a combined capacity of 2.6Mt/yr. It also has a 25MW captive power plant under construction. It had a debt of US$118m at the end of its 2015 fiscal year. If the deal transpires at US$162m, it will translate into an enterprise value of US$64/t of cement capacity. This is lower than the average valuations of US$100/t of the recent deals in the sector.

"We would like to clarify that, though the company does hold discussions internally now and then in an informal way on expanding its operations through organic and inorganic routes, no particular entity has yet been identified for a possible acquisition," said an Andhra Cements spokesperson.

For Sagar Cements, the deal presents several long-term synergies. The acquisition will enhance its current capacity of 3.8Mt/yr by 2.6Mt/yr. Secondly, Sagar Cements will add the capacity at a time when the creation of two new states, Telangana and Andhra Pradesh, is expected to generate an incremental cement demand of 30Mt in the region in the next five years.

Last week we promised reasons to be cheerful for the cement industry. We only have one to offer this week but it's a good one. At present three Indian cement companies are on sale: Lafarge India, Reliance Cements and Jaiprakash Associates. If these sales complete then it represents an opportunity for the Indian cement industry to reorganise itself and stride forward when growth recovers.

Lafarge India upped its sales proposal to the Competition Commission of India (CCI) on 6 January 2016 to sell its entire 11Mt/yr portfolio. Originally as part of the LafargeHolcim merger agreements the CCI asked Lafarge to sell 5.2Mt/yr of production capacity in Chhattisgarh and Jharkhand in eastern India. However the deal was reliant on the original buyer, Birla Corporation, securing limestone mining rights. Birla failed to do so. Now Lafarge India has decided to sell everything instead. Naturally, following its Euro8bn spending spree in 2015 CRH has been linked to the sale by Indian media.

Then following press speculation Reliance Infrastructure confirmed to the Bombay Stock Exchange on 11 January 2016 that it was at an 'advanced stage of discussions with potential buyers for divesting the cement business of the company.' Reliance's cement arm, Reliance Cement, holds three cement plants in Maihar in Madhya Pradesh, Kundanganj in Uttar Pradesh and Butibori in Maharashtra with a total production capacity of 5.8Mt/yr. In addition to this, the company is also developing a 5Mt/yr cement plant at Wani in Maharashtra. The Reliance sale has been reported upon since early 2015. The difference this time is that Reliance responded to local press reports that it was about to sell to Birla Corporation or a couple of other private equity firms.

Finally, the third sale concerns Jaiprakash Associates' on-going attempts to sell its remaining cement assets to service its debts. Jaiprakash Associates cement subsidiary, Jaypee Cement, holds eight plants in India with a cement production capacity of 11Mt/yr. In addition it holds six cement grinding plants with a capacity of 10.7Mt/yr. Despite reported attempts to sell the entire division in one Jaypee has actually ended up selling its cement assets in a piecemeal fashion one or two at a time. The most recent sale being announced this week is to sell its Bhilai Jaypee Cement to Shree Cement. This follows other sales to HeidelbergCement and UltraTech in 2015.

None of these sales are new exactly but the combined production capacity of these plants comes to just under 28Mt/yr. This represents 9% of India's total national cement production capacity of 310Mt/yr. Any player somehow able to weasel their way into striking a deal for all of these plants would immediately become one of the country's biggest producers.

It would definitely be a case of buyer beware though. Credit agency ICRA recently reported that it expects that cement demand growth will be a 'modest' 4% in the 2015 - 2016 financial year before picking up in the following year. This follows poor growth in cement demand in the first half of 2015 and even declines in March and April 2015. ICRA also expected the country capacity utilisation to drop to 70% in the 2016 financial year, down from 77% in the 2012 financial year. That 7% drop in the utilisation is awfully close to the 9% of Indian national production capacity that the cement assets currently on sale from Lafarge India, Reliance Cement and Jaypee Cement. Unsurprisingly, the buyers of Indian cement assets have been picking and choosing their plants one-by-one so far.