Displaying items by tag: Karnataka

India: Jaiprakash Associates has revised a US$2.4bn deal to sell cement plants to and UltraTech Cement. The new deal excludes a 1.2Mt/yr cement plant in Karnataka. UltraTech will also spend US$71m to complete a cement grinding plant that is currently being built. UltraTech will now acquire Jaiprakash Associates cement plants in five states with total capacity of 21.2Mt/yr. Jaiprakash Associates will retain a cement capacity of 10.6Mt/yr.

A Memorandum of Understanding signed in February 2016 agreed the terms of the sale. However, currency fluctuations between the Indian Rupee and US Dollar have kept the US Dollar value of the revised deal at a similar amount despite a drop in the Indian Rupee amount. The sale is expected to take around 12 to 14 months to complete subject to statutory and regulatory approvals.

India: UltraTech Cement has signed a Memorandum of Understanding to buy Jaiprakash Associates’ cement plants, which have a total cement production capacity of 22.4Mt/yr. The deal includes both integrated cement plants and cement grinding plants. The plants are situated in Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Andhra Pradesh and Karnataka.

The acquisition also includes a 4Mt/yr cement grinding plant being built in Uttar Pradesh. UltraTech will pay an additional US$68.7m for this plant once it is completed. The deal will increase UltraTech’s total cement production capacity to 90.7Mt/yr from 68.3Mt/yr. The transaction is subject to regulatory approval.

India: Chettinad Cement Corporation is moving forward with plans for projects in Andhra Pradesh, Maharashtra and Karnataka costing a total of US$616m.

The Indian cement producer is building a greenfield 3.5Mt/yr integrated cement plant in the Guntur district of Andhra Pradesh at a cost of US$181m. It is expanding its cement plant at Gulbarga in Karnataka to 5.75Mt/yr from 2.5Mt/yr and adding a 130MW captive thermal power plant at a cost of US$330m. It is also building two 2Mt/yr grinding plants and two 50MW thermal power plants at Solapur, Maharashtra at a cost of US$108m.

Chettinad Cement has received all the necessary clearances for its greenfield project in Andhra Pradesh and an expansion project in Karnataka, according to local media. The projects in Andhra Pradesh and Karnataka are expected to be operational within three years of the start of construction. The company has acquired 1000 acres for its proposed cement plant in Andhra Pradesh and 120 acres for its grinding plant in Maharashtra.

"In the last 20 years, the installed capacity of the cement units has increased from 1Mt/yr to 13.5Mt/yr. With the commissioning of new and expanded units, it is possible to scale up to 20Mt/yr,'' said Chettinad Cement Group Managing Director MAMR Muthiah.

Muthiah added that the company had a debt-equity ratio of 1:1. The upcoming projects will be financed through a combination of debt and internal accruals. Chettinad Cement is also considering expansion opportunities in Gujarat, Madhya Pradesh and Rajasthan. At present, Chettinad Cement is currently operating at 50% of its production capacity due to 'sluggish' market conditions.

India: Cement consumption in India fell for the first time in nearly 20 years in the three months to 30 June 2011, with a political impasse in large consumer states holding up infrastructure and realty projects. Demand fell by 0.68% during the period compared with the corresponding period in 2010 but demand changes were different depending on location. In Andhra Pradesh, demand contracted by 21% and in Karnataka it was down by 8.04%, according to data from Cement Manufacturers' Association (CMA).

Elsewhere, demand was down by 2% in June 2011 in Kerala and in Tamil Nadu, it was down by 1.9%. In comparison Gujarat saw cement demand grow by 4.9%, but growth was less strong than the same period of 2010, when 15% cement demand growth was seen.

The demand for cement is not assisted by problems that are expected to hinder government's proposed USD107bn investment in state road development during the 12th Plan period. The government has cited a lack of capacity in the private sector to make large investments, political sensitivity surrounding road-tolling, land acquisition disputes (which have caused a slow-down and resentment from locals at the site of the Formula 1 circuit site in Greater Noida, Uttar Pradesh) and a shortage of trained manpower as key problem-areas that may hamper the execution of the programme, due to start in 2012.

It is estimated that because of these problems, around 80% of the cost of the proposed investment will have to be met by public funds. The plan includes the construction of over 30,000km of new dual-carriageways, 5000km of four-lane highways and another 41,500km of single-track roads that are due for restructuring. The plan stipulates that the roads will be finished with either cement-based finishes or asphalt.