Displaying items by tag: India
UltraTech buys Jaypee’s Madhya Pradesh cement plants
29 January 2015India: Jaiprakash Associates (Jaypee Group) has announced that it will sell two cement plants in Madhya Pradesh State to UltraTech Cement. The assets comprise cement plants and grinding facilities in Bela and Sidhi with a total capacity of 4.9Mt/yr, along with an associated 180MW power plant to supply them.
UltraTech will pay US$740m in non-convertible debentures (loan certificates) and shares worth US$16m for the facilities. It will also assume a net debt and negative working capital of US$128m associated with the businesses. This puts the overall value of the transaction at US$628m.
The sale is part of Jaypee's programme to pay-down debt. It has sold assets worth US$3.6bn in pursuit of this aim. This includes some US$1.6bn of assets in its cement business. However, it said that it remains India's third-largest cement producer, with a capacity of 22Mt/yr.
Jaypee's largest previous cement divestment was also to UltraTech. In 2014, it sold a 2.4Mt/yr cement plant in Kutch and a 2.4Mt/yr grinding plant in Wanakbori, both in Gujarat State, for US$620m. The deal was closed in June 2014. In September 2014, Jaypee announced the US$60m sale of its 1.5Mt/yr grinding plant in Panipat to Shree Cement. It also sold its 74% stake in Bokaro Jaypee Cement Limited, a cement joint venture with the Steel Authority of India (SAIL) to Dalmia Cement for US$115m.
India begins coal block allocation process
27 January 2015India: The Coal Ministry has begun the process of allotment of mines to central and state public sector units, starting with the allotment of 36 coal blocks.
The Supreme Court had in September 2014 scrapped all but four of 218 coal blocks allocated by the government over the past two decades, in a tougher-than-expected ruling that sank shares of companies that have invested heavily in projects around the concessions. Most power, steel and cement companies that won blocks have until end-March to return them and the government then plans to auction them off. The previous practice of selective allocation was ruled illegal and arbitrary by the court.
Coal secretary Anil Swarup said that the ministry has started the process of coal allocation. "Today, we are issuing a notification for the allotment of 36 coal blocks. More mines will be added subsequently depending on the requirement. It will depend on the request we receive from state entities or the public sector undertakings in terms of allocation of coal blocks," said Swarup. He added that the ministry would issue guidelines for the coal blocks and those firms that already have coal linkages will have to surrender them. Once the linkages are surrendered then more coal will be made available to state-owned Coal India Limited. Coal India accounts for about 80% of the country's total output. Coal fuels 60% of the country's power production.
"Out of 101 mines, we are looking at 98 mines, as the coal ministry has examined them and it was discovered that there were three blocks in a 'No Go' area. Out of 98 mines, 36 blocks are going for allocation. 42 mines are auctioned, 23 blocks are in schedule II and 23 blocks are in schedule III. The remaining 16 will be auctioned in the future," said Swarup. Around 167 bidders have requested to visit the coal block site.
Coal India plans to engage an external consultant to examine various structures and implementation models to auction the coal linkages. The consultant would examine various structures and implementations models for the auction of coal linkages / LoAs (Letter of Assurances) or other such market-based mechanisms and to recommend the optimal structure that would meet the requirements of all the stakeholders.
JK Lakshmi's US$276m Durg cement plant starts production
22 January 2015India: Built at a cost of more than US$276m, JK Lakshmi Cement's new Durg cement plant in Chhattisgarh has started production.
The plant has an installed capacity of nearly 2.7Mt/yr. Following commissioning, JK Lakshmi Cement's installed cement production capacity stands at 9.3Mt/yr. A part of the US$4bn JK Organisation, the Durg plant will produce various types of cement, including Ordinary Portland cement, Portland pozzolana cement and slag cement.
The Durg project had in 2013 attracted the wrath of the local inhabitants, who set fire to part of the under-construction plant. They were reportedly angered by the reluctance of JK Lakshmi Cement to give jobs to people affected by the project. This caused serious damages at the construction site.
Lafarge India to buy back 14% stake from Barings Asia
22 January 2015India: Lafarge India has begun the process of buying back the 14% stake it sold to global private equity investor Barings Asia in May 2013 for US$265m. This comes about nine months after Lafarge and Switzerland's Holcim announced their intention to merge their global assets, including those in India.
The move is part of the sale agreement that Lafarge signed with Barings Asia, which said that any changes in shareholding structure will trigger the buy-back clause. According to local media, the process has just started and may take a few months. Once the Competition Commission (CC) has cleared the LafargeHolcim merger proposal, the process is expected to gather steam.
India: Cement companies that operate in East Jaintia Hills District, Meghalaya State face a precarious situation due to a ban imposed by National Green Tribunal (NGT) on the extraction and transportation of coal. As coal is a major fuel used by the cement plants in the region, its non-availability threatens to close the plants.
"Coal demand from cement plants is huge and if there is no supply, all the cement companies will have no other option but to shut down their plants," said a representative at one of the cement plants affected by the ban. He lamented that the NGT court had lifted the ban on transportation of the assessed and extracted coal for transportation to Beltola District, Assam State, only. "However, the cement plants in East Jaintia Hills have not received any coal due to the non-availability of a weighbridge in the district," he said. "Approximately 2000 - 2500 trucks are seen transporting coal to Assam every day."
India: Sanghi Industries Limited will invest US$40.5m over next couple of years with a focus on sustainable development, innovation and energy conservation. The company plans to invest US$24.3m to develop a 15MW waste heat recovery system (WHR) and another US$16.2m to further develop its facilities at Navlakhi Port in Gujarat State.
Sanghi Industries has signed a contract for installation of a WHR system at its cement plant in Kutch, Gujarat, whereby 15MW of power will be generated from the waste gases released. With the technology, valuable fossil fuel savings will be made, foreign exchange costs will be saved and there will be a significant reduction in the emission of pollutant gases. Sanghi will recover more than 70% of the waste heat generated from its cement plant.
For the conservation of coastal soil, the company will undertake a mangrove plantation spread over 2km2 on the Gujarat coast. The initiative will protect the ecology of the coast and improve socio-economic development.
"Our focus is on increasing efficiencies at our manufacturing facilities as well as reducing our carbon footprint by cutting down on pollutants that affect the environment," said Alok Sanghi, director of Sanghi Industries. "Also, in line with the Ministry of Shipping agenda to increase transportation through the coastal sea rout, Sanghi has set up a terminal with an investment of US$8m at Navlakhi Port. We will invest an additional US$16m to further develop the terminal at Navlakhi as the sea route reduces our transportation cost considerably."
CCI to decide on LafargeHolcim merger in February 2015
20 January 2015India: The Competition Commission of India (CCI) will soon decide on the proposed merger of Lafarge and Holcim, according to CCI chairman Ashok Chawla on 19 January 2015. "The final order on the case should be out within a month," said Chawla.
The CCI is examining the merger as it raises competition concerns. In a joint filing to CCI, Lafarge and Holcim had said that they would continue to face aggressive competition from Indian cement makers such as UltraTech, Shree Cement and Jaypee at a pan-India level.
The total installed capacity of cement in India is about 350 Mt. Domestic consumption, which stood at 242Mt in 2011 - 2012, was expected to increase to 265Mt in 2012 - 2013.
JSW to boost cement capacity to 30Mt/yr by 2025
19 January 2015India: JSW plans to expand its cement production capacity to 30Mt/yr from 5Mt/yr by setting up grinding units closer to its steel plants. As part of its diversification, it is also considering the production of aluminium, if the government allocates bauxite mines to it.
Seshagiri Rao, joint managing director of JSW Steel, said that the company's presence in the cement business is small compared with other companies with 60 – 70Mt/yr of production capacity. JSW's plan is to become a significant player in the sector, with 30Mt/yr of production capacity by 2025, he added.
For instance, a grinding unit installed closer to the Dolvi steel plant in Maharashtra State could source clinker from Gujarat State, mix it with slag available from the plant and tap the vibrant western market. "Alternatively, we could also set up grinding units closer to the cement market and take our slag there," said Rao. "We would source clinker from the closest available location so that we remain competitive."
The Tamil Nadu State Government recently notified a scheme whereby cement companies are asked to quote their factory gate price. Contractors were given the price list to source cement for their projects. JSW Cement has also placed its bids under the scheme. "I believe that other State Governments will also emulate the Tamil Nadu Government model to make cement available for their projects at a competitive price without any subsidy," said Rao.
Osvaldo Ayres Filho resigns from Shree Digvijay Cement
14 January 2015India: Osvaldo Ayres Filho has resigned as a director from Shree Digvijay Cement Company. His resignation was effective from the close of business on 13 January 2015.
Aditya Birla Group to invest US$3.19bn in Gujarat
12 January 2015India: Kumar Mangalam Birla has said that the Aditya Birla Group will invest US$3.19bn in Gujarat State to ramp up capacities across various existing facilities.
"We will be continuing to grow our businesses here," said Birla. "On the anvil are brownfield expansions at our cement plant in Sevagram, the viscose staple fibre (VSF) plants in Vilayat and Bharuch and expansions of our metal plants, among others. Our investments will be close to US$3.19bn."
He added that Gujarat is the group's preferred investment destination in India. "We're greatly impressed by the proactive approach of Government of Gujarat. I have a personal bias for the state," said Birla. He added that it was not tax sops, but delivery of high-quality infrastructure that makes it the group's preferred state.