Displaying items by tag: India
India: On 9 May 2016 Dalmia Cement withdrew their challenge to a conditional approval given by India’s anti-trust regulator to the proposed merger of Lafarge and Holcim in india. The Competition Appellate Tribunal (CAT) has accepted Dalmia’s decision, paving the way for the sale of Lafarge India’s 11Mt/yr of cement capacity as a part of the merger conditions.
A statement from LafargeHolcim stated, “We are happy Dalmia has withdrawn their appeal to the CAT and look forward to completing the sale of Lafarge India.”
India: Cement maker Burnpur Cement plans to invest US$75m to increase the company’s grinding capacity from 0.6Mt/yr to 3Mt/yr, according to the company's vice chairman and managing director Ashok Gutgutia. He said that the investment would be spent over the next three to four years.
Burnpur Cement is a small Indian cement producer that operates two plants, one in Asansol (West Bengal) and one in Patratu (Jharkhand). Each plant operates at a capacity of 0.3Mt/yr.
How the investment will be split between the plants is unclear, but the announcement comes as the company is building a third 2Mt/yr plant in West Bengal, which was announced previously. When the three projects are complete Burnpur will have increased its capacity by nearly 10-fold, from 0.6Mt/yr to 5Mtyr.
India: India's upper house of Parliament has approved changes to the country's mining law to make it easier to sell mining rights, a move that could spur acquisitions in the cement and mining sectors.
Lawmakers approved the Mines and Minerals (Development and Regulation) (Amendment) Bill, allowing the transfer of mining rights by companies that received them through a government allocation. The bill was cleared by the lower house of Parliament in March 2016 and now needs to be signed off by the President to become law.
In the past, mining rights had either been distributed to companies through government auctions or through individual allocations, a method that raised questions about arbitrariness in decision-making.
In 2015 the government implemented a new law that made it mandatory to auction mining rights. It also permitted the transfer of mining rights previously won through auction, but was silent on whether rights received through a government allocation for captive uses could be sold.
The latest rule provides clarity and could help speed up proposed merger deals such as UltraTech Cement’s planned takeover of Jaypee Group's cement plants and LafargeHolcim's plan to sell two cement units to Birla Corp.
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.
India: UltraTech’s net profit has risen by 8% year-on-year to US$479m for its financial year that ended on 31 March 2016 from US$449m in the same period in the previous financial year. Its net sales rose by 5% to US$3.8bn from US$3.6bn. It reported that its portland cement sales volumes grew by 8% to 46.9Mt in the 2015 – 2016 financial year from 43.4Mt. It noted that its operating costs fell due to improved operational efficiency, a better fuel mix and a fall in fuel prices.
The Indian cement producer commissioned a 6MW waste heat recovery (WHR) system at Chittorgarh, Rajasthan during the January to March 2016 quarter. Overall, it generates 59MW from WHR. Since commissioning cement grinding plants at Jhajjar, West Bengal and Patliputra, Bihar the company’s cement production capacity is 66.3Mt/yr. It also signed a Memorandum of Understanding to buy cement plants from Jaiprakash Associates in late February 2016. The cement plants altogether have a total cement production capacity of 22.4Mt/yr.
In its outlook UltraTech expects cement demand to grow by up to 8% in the 2016 – 2017 financial year. This will be supported by government infrastructure and housing development.
JK Cement stops production at Muddapur plant
27 April 2016India: JK Cement has stopped clinker and cement production at its Muddapur cement plant in Karnataka. It reported finding cracks in a raw material silo.
Jaiprakash Associates cuts back business in north India
22 April 2016India: Jaiprakash Associates has withdrawn from some of its markets in north India as part of a streamlining its operations. A spokesperson for the parent Jaypee Group confirmed that the company has chosen to withdraw from certain markets in Haryana and Delhi, according to Livemint.
"The company continues to sell cement in markets of north India. However, as a strategy the company has increased its focus on high realisation markets and has withdrawn from certain markets of Haryana and Delhi where due to low prices and high freights (long lead markets) the net realisation was very low and operations unviable," said a spokesman for Jaypee Group.
Non-payment to truck drivers and coal shortages at its cement plants in Himachal Pradesh are believed to have contributed to the decision to exit the north Indian market. Jaiprakash Associates has a cement production capacity of 4Mt/yr in Himachal Pradesh.
In late March 2016 Jaiprakash Associates signed an agreement with UltraTech Cement to sell 21.2Mt/yr of cement assets in five states for US$2.4bn. Following the deal Jaypee Group will be left with 10Mt/yr in Madhya Pradesh, Uttar Pradesh, Andhra Pradesh and Karnataka.
Piramal Enterprises invests US$38m in Sanghi Industries
22 April 2016India: Piramal Enterprises has invested US$38m in Sanghi Industries. The investment has been made through non-convertible debentures to enable Sanghi to repay some of its debts ahead of schedule and reduce interest repayments.
Piramal Enterprises is a diversified international conglomerate that operates in the pharmaceutical, financial services and information management sectors. Sanghi Industries runs a 2.9Mt/yr integrated cement plant in Kutch, Gujarat.
India: The Pollution Control Board of Assam has held a public hearing on a proposed 1Mt/yr cement plant at Jorabat, Mauza Sonapur in the state of Assam. Locals and Pollution Control Board officials were present during the hearing, where all the stakeholders put forward their opinions on the project. Most local people supported the project, provided that employment was prioritised to nearby villages and within the state, according to the Assam Tribune. Locals also emphasised the importance of the pollution control system of the plant.
KR Associates is planning to build the 500t/day clinker producing plant. It will have a cement grinding production capacity of 500t/day. A 26,850m2 plot of land has been acquired for the plant. The project will use 3600kW of power sourced from the Assam State Electricity Board. Once completed the plant is expected to employ 110 workers. Proposed air pollution control measures for the plant include bag filters and an electrostatic precipitator for the cooler exhaust stack.
Dalmia challenges the Lafarge India sale
20 April 2016Dalmia 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.