Displaying items by tag: India

India: Following the successful vote to re-structure Holcim's India operations, Ambuja Cements and ACC, the integration of common functions across the two companies has begun.

Holcim wants to eradicate the duplication of roles across the two companies that will aid in savings of US$144m through synergies in supply chain and fixed cost optimisation. The integration will see big changes for some of the two companys' 10,000 employees. Some will be relocated to the group's upcoming facilities as the cement makers have no plans to cut spending.

"The restructuring is about deriving further value from the Indian platform," said Anantharam Gopalkrishnan, vice president for the treasury and tax at Ambuja Cements.

Holcim intends to keep the two brands, Ambuja Cement and ACC, independent. It does not plan to launch the Holcim brand in India or market the two brands with the Holcim tag. When the integration process is completed, which is currently scheduled for 2015, Holcim intends to evaluate the full merger of the operating companies into one unified entity.

Germany/India: The exclusive Cooperation Agreement will enable MVW Lechtenberg & Partner (Germany) and Tridiagonal Solutions (India) to combine activities in the worldwide cement and lime industry to utilise Computational Fluid Dynamics (CFD) models to develop, design and troubleshoot combustion processes.

CFD is the computer-aided solution technique to describe and simulate flow-related physical phenomena such as fluid flow, heat transfer and combustion. CFD has proven itself as a powerful technique to solve flow-related problems across a range of industries. Various cement, lime and power plant applications that can be analysed using CFD include kilns and boilers, flue gas cleaning systems, bag filters, bypass systems, NO_x reduction systems, heat recovery steam generators and related equipment.

"With recent advances in the understanding of combustion, multi-phase, turbulent reacting flows and computational resources, it is now possible to develop and use computational models to simulate the performance of cement and lime plant equipment with our huge database on alternative fuels and raw materials and their influence on processes. With the outstanding experience of Computational Fluid Dynamics (CFD) modeling professionals from Tridiagonal Solutions we can now provide a reliable and cost effective process modeling solution to the industry," said Dirk Lechtenberg, managing director and founder of MVW Lechtenberg & Partner.

Besides CFD Modeling, the cooperation also offers a powerful framework for state-of-the-art technology services that include process engineering and consulting (including manufacturing of pilot plants), experimental fluid flow modeling, discrete element modeling (DEM), granular dynamics consulting (EDEM - CFD coupled simulations) and simulation software development.

"Tridiagonal has been delivering process performance enhancement and product development solutions to leading companies from chemicals and process, oil and gas, power generation, pharmaceuticals, and the automotive industry. We are excited to partner with MVW and bring our expertise to the cement and lime industry. The synergy between Tridiagonal and MVW's expertise will lead to new insights and innovative solutions in the cement and lime industry worldwide" said Sandeepak Natu, Head-India Europe Business Unit of Tridiagonal Solutions.

India: Shree Cement Ltd announced on 25 November 2013 that Shri Mahendra Singhi, Executive Director of the Company, had resigned with effect from 6 December 2013. No further details were made provided.

India: Gangotri Cement has appointed Rajendra K Shah as an additional Independent Director with effect from 25 November 2013. Shah has also been appointed as a member of the Audit Committee and Shareholders' Grievances Committee of the Board of Directors of the Company. Gangotri Cement said that Ravi Kamra had resigned as a Director due to personal and professional commitments.

India: Chandrasekhar Hiremath, president of the Shramajeevigala Karmika Sangha and a trade nion leader, has alleged that two cement plants in Karnataka are not paying the minimum wage to contract and full-time workers. According to comments reported upon by The Hindu, Hiremath said that the Regional Labour Commissioner in Bellary, Karnataka had failed so far to ensure that workers were being paid properly at the UltraTech Cement plant at Malkhed and Vasavadatta Cements at Sedam.

A national wage settlement signed between the employees' unions and cement producers entitles all contract labourers and full-time workers to receive the wages fixed by the Cement Wage Board. Hiremath further alleged that Vasavadatta Cements had submitted a misleading report to the Regional Labour Commissioner. Daily wages of contract labourers and full-time workers at the plant were US$7 as opposed to the US$9.50 minimum set by the board.

Minority shareholders have bowled a googly at Holcim's attempt to simplify its business structure in India.

Or for readers unacquainted with cricket terminology, domestic institutions which hold about 9% in Ambuja Cements have been widely reported in the Indian media as having voted against a move to merge the cement producer with its parent company, Holcim India. The final results of the shareholders vote will be publicly announced on 21 November 2013. The shareholders actions follow Holcim's recent approval by the Indian Foreign Investment Promotion Board for the merger.

That this is bad news for Holcim is not in doubt given that the multinational cement producer has taken a hit in its Asia-Pacific region, particularly in India. Overall for the region its operating profit fell by 32.5% year-on-year to US$333m for the quarter to 30 September 2013.

Specifically, Ambuja Cements managed to maintain its sales volume of cement and clinker year-on-year at 4.89Mt for the third quarter. However, its net profit after tax fell by 45.4% to US$27m. It blamed the decline on subdued demand due to overall economic slowdown combined with higher input costs. Meanwhile, ACC saw its sales revenue from cement fall slightly to US$388m for the third quarter while its profit for cement before costs and tax fell by 57% year-on-year to US$22m.

As mentioned in August 2013 when this column last looked at India, the parallels to cement industry consolidation in China are telling. In China guidelines have been issued to cut overcapacity in the cement industry, with the Ministry of Industry and Information Technology releasing lists of companies that should cut excess production. Alongside this, the country's leading cement producers have reported a return to profit so far in 2013. Who exactly is taking the loss from this production retraction in China, if it is happening, remains unreported and unclear.

In India, much more light has been shone upon an over-producing cement industry. Holcim and its subsidiaries are just some of the companies reporting falling profits at present. Ambuja's minor shareholders look like they have made a decision that is counter to the best interests of the Indian cement industry.

In a recent UK newspaper article, political theorist David Runciman compared the respective merits of democratic and more autocratic modes of government. Unsurprisingly for a British academic Runciman came out in favour of democracies, yet the advantages of more centralised governments were noted, such as the ability to make wide-reaching decisions faster and more comprehensively.

In light of this, comparing the Indian and Chinese cement industries in 2040 will be fascinating. Minor shareholder tussles will likely be forgotten but cement (and hopefully cricket) will be as vital then as they are now.

India: Domestic institutions, which together hold 9% in Ambuja Cements and have voted against the Ambuja-Holcim merger deal, have left the whole transaction on a knife-edge as Holcim is now banking on foreign funds to rescue it.

For the US$2.32bn deal to go through, Holcim needs approval from the majority of Ambuja Cements' minority shareholders.

This is the first merger and acquisition transaction to go under the hammer of minority shareholders after India's capital market regulator, Sebi, empowered them to approve or reject transactions in February 2013.

The voting process, which ran for three weeks, closed on 19 November 2013 and early indications suggest that most of the Indian minority shareholders have voted against the deal.

LIC, the biggest Indian institutional investor in Ambuja Cements, GIC and other public sector insurance companies have voted against the deal that would enable Ambuja Cements to emerge as Holcim's flagship firm in India.

The exact response of foreign institutions such as Aberdeen, JP Morgan and Oppenheimer, who together own about 30% stake in Ambuja Cements could not be ascertained.

Ambuja Cements declined to comment on the voting results, which will be officially released on 21 November 2013.

India: Holcim has received approval from the Foreign Inevestment Promotion Board (FIPB) to merge holding firm Holcim India with its unit Ambuja Cements as part of a plan to restructure its India operations.

Holcim, which has majority stakes in two leading Indian cement makers, ACC and Ambuja Cements, announced in July 2013 its plan to consolidate operations in a cash and share deal in a two-step process, valued at about US$2296m. However, since Holcim's proposal is more than US$190m, it required approval of the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manamohan Singh.

Holcim said that as part of the restructuring process, Holcim India's over 50% stake in ACC will go to Ambuja and Holcim's stake in Ambuja will rise to 61.4% from a little over 50% following the merger of Holcim India with Ambuja.

Ambuja Cements would merge Holcim India through cash and share transactions. Ambuja will first acquire a 24% stake in HIPL for US$554.1m.

India: Continued oversupply coupled with low prices pushed The India Cements Ltd (ICL) into the red in the second quarter of 2013. The South India-based cement company said that it had incurred a net loss of US$3.6m for the quarter ending 30 September 2013, compared with a net profit of US$7.8m during the same quarter in 2012. Weak demand for cement resulted in mounting pressure on cement selling prices.

India: Birla Corporation is planning invest around US$154m to set up new units in four states, according to local media. The company will set up three grinding cum blending units in Madhya Pradesh, one grinding unit in Bihar, one blending unit in Uttar Pradesh and another in Jharkhand, which will have a combined capacity of 4.5Mt/yr. Birla Corporation has eight manufacturing facilities located in Pune, Rajasthan, West Bengal, Gurgoan, Uttar Pradesh and Madhya Pradesh.