Displaying items by tag: India
KKR backs SIMEC on ABG Cement buyout
02 July 2015India: According to The Economic Times, private equity company KKR will team up with diversified trading and commodities group SIMEC to invest US$142m to take over the cement business of debt-laden ABG Group through a complex, multi-tiered financial transaction. The funding will help ABG's founder promoter Rishi Agarwal to complete the 'last mile' of his much-delayed cement plant project in Gujarat.
The first leg of the 'special situations' transaction, which will be concluded in the coming weeks, will see KKR fund SIMEC to gain a 51% controlling stake in ABG Cements for US$82.6m. This will be followed by an additional US$60.6m of funding collateralised by Agarwal's unencumbered shares in the company. The money will be used to finish the project, fund working capital and pay back overdue creditors.
ABG Cement has been planning a 5.8Mt/yr cement plant in Gujarat since 2010. However, due to significant cost and time overrun, only a 3.3Mt/yr clinker plant at Kutch near the limestone reserves was completed. Agarwal ran out of money to complete the grinding unit at Surat. The plant is ultimately expected to produce slag cements with blast furnace slag coming from Essar Steel. It will be the only slag cement plant in western India.
SIMEC has already made a part payment to show its commitment to the deal. KKR, too, has signed a term sheet with ABG's management. A detailed due diligence process is currently ongoing. In 2014, SIMEC had agreed to buy into ABG's cement business, but the deal was not concluded. Now with KKR's funding, it is expected to close soon.
Lafarge India names Ujjwal Batria as CEO
26 June 2015India: Lafarge India has appointed Ujjwal Batria as CEO of the company effective from 22 June 2015. Batria will take over the responsibility from Martin Kriegner, who has been named as area manager for Central Europe of LafargeHolcim.
The development comes shortly before the expected completion of the LafargeHolcim merger. The Indian Competition Commission of India (CCI) has already approved the Indian leg of the proposed merger, with certain provisions, including divestment of two cement plants; Lafarge's plants at Jojobera, Jharkhand and Sonadih, Chhattisgarh. The two plants have a combined capacity of 5.15Mt/yr. Holcim's business in India is run through ACC and Ambuja Cements. It is not clear what Batria's role will be in the merged LafargeHolcim entity. Since ACC and Ambuja Cements are public listed firms, Lafarge's Indian unit may continue to operate separately, at least to begin with.
Prior to his appointment as CEO of Lafarge India, Batria was managing director of the company and was managing its cement business. He has been with Lafarge for 16 years. He had joined the company in 1999 and has served on different position across functions since then.
JSW Cement to start four greenfield grinding units
29 June 2015India: According to the Deccan Herald, JSW Cement plans to start four more greenfield grinding plants, two each in West Bengal and Tamil Nadu, as part of its plan to grow its cement and clinker capacities to 20Mt/yr by 2018.
JSW Cement director and CEO Anil Kumar Pillai said that the company expects cement demand growth in its current fiscal year, which ends on 30 September 2015 and will gain pace in the next fiscal year. "The government's new infrastructure-led industrialisation plan will really boost cement demand. Already analysts have predicted a double-digit GDP growth rate, which will give a 15% hike in cement demand," said Pillai.
The greenfield projects are part of JSW Cement's US$1.41bn investment plan. "Each of the projects will have an investment of US$54.8 – 62.6m. In Tamil Nadu, we have identified one location at Tuticorin and the other will be near Puducherry. It will take 36 months to commission the units. Funds for these projects will be raised via internal accrual and bank borrowings," said Pillai.
JSW Cement is looking for land in West Bengal and will announce the details soon. The company has production plants in Vijayanagar and Bellari in Karnataka, Dolvi in Maharashtra and Nandyal in Andhra Pradesh. JSW Cement has achieved 55% of its production capacity in the last fiscal year. "In the last fiscal year, we produced 3.2Mt of cement and we have set a target of 4.2Mt in the current fiscal year. We expect to achieve 65% capacity utilisation once growth momentum gains in the third and fourth quarter," said Pillai.
Regarding industry rumours that JSW Cement is in the race to acquire Lafarge's cement assets in Jharkhand and Chhattisgarh, Pillai said that the company was open to inorganic growth and will not go for exports.
Meanwhile, JSW Cement is installing a 10MW power plant that uses waste gas in Nandyal. "JSW Cement has committed US$15.7m of investment for this project and it will be commissioned within 12 to 14 months," said Pillai.
India: JK Cement has received the necessary approval to make Jaykaycem (Central) its wholly-owned subsidiary by acquiring 100% of the paid up equity capital. The JK Cement board of directors approved the move on 26 June 2015.
India: According to Finalaya News, Mauritius Debt Management has sold a 0.65% stake in Saurashtra Cement for US$210,807. It sold 330,000 shares at an average price of US$0.63 on the Bombay Stock Exchange (BSE).
India: According to the Financial Express, Jaiprakash Associates is close to selling its 1Mt/yr capacity cement plant at Sikandarabad, Uttar Pradesh to HeidelbergCement for around US$78.6m.
If the deal materialises, it would be the fifth cement asset sale by Jaiprakash Associates in little over a year. The group is looking to sell assets, including cement and power plants, to reduce its large debt. The aggregate debt of the group at the end of the 2014 financial year, which ended on 31 March 2014, stood at around US$8.65bn. Though it has so far divested assets worth US$2.36bn, the impact of the asset sales is yet to reflect on the group's balance sheet. It aims to cut down debt further by around US$1.57bn by the end of the current 2016 fiscal year, which ends on 31 March 2016. So far, Jaiprakash Associates has divested around 13Mt/yr of its overall cement capacity and is left with around 23Mt/yr.
Unnamed sources have said that Jaiprakash Associates also plans to sell two more of its cement plants, in Baga and Bagheri in Himachal Pradesh and Balaji in Andhra Pradesh, but the matter is stuck due to valuation issues. Aditya Birla Group's UltraTech Cement and HeidelbergCement have reportedly been in talks regarding their acquisition.
Heavy industries set to miss deadline for installing online emissions monitoring systems
24 June 2015India: According to Live Mint, the majority of 3261 highly-polluting industries in India, including the cement and steel sectors, are set to miss the June 2015 deadline set by the ministry of environment, forests and climate change (MoEFCC) to install online effluent and emission monitoring systems.
Most industries have recently sought an extension to September 2015, although some from sectors like petrochemicals and refinery asked the deadline to be extended to June 2016. The environment ministry is considering the former plea. "The ministry is favourably considering extending the deadline until September 2015 for the majority of industries. But we are not sure about extending it to June 2016 for certain industries. A final call will be taken soon in this regard," said a senior environment ministry official.
On 16 - 17 June 2015, the Central Pollution Control Board (CPCB) held a meeting of industrial associations and common waste management facilities to review the status of compliance of their directions regarding the installation of online effluent and emission monitoring devices. According to the minutes of the meeting, 'By-and-large, associations have agreed to meet the deadlines by September 2015, except in the case of mini cement plants, refinery, petrochemicals and common bio-medical facilities.'
In December 2014 the CPCB identified 3261 industries in 17 categories of highly-polluting industries, including the cement, iron and steel, thermal power plants, sugar, tannery, distillery, fertilisers and pesticide sectors. The CPCB had asked the industries to install online effluent and emission monitoring systems by June 2015, failing which bank guarantees of 100% of the cost of online systems (emission or effluent) would be forfeited. The CPCB had also said that its 'consent to operate' would be withdrawn from non-complaint industries.
India: According to Focus News, cement carrier MV Coastal Pride has sunk 45km south of Daman, Gujarat on 24 June 2015. The Navy and Coast Guard rescued 14 crew members of the vessel. The Coast Guard picked up six persons before the ship sank, a helicopter saved six crew members from the water and the Coast Guard rescued two further people after the boat sank. The rescued crew were evacuated to Umargaon, Gujarat.
India: According to the Press Trust of India, at least five suspected A'chik Matgrik Elite Force (AMEF) terrorists attacked the Virgo cement plant in Damas, North Garo Hills, Meghalaya in the early morning on 18 June 2015. Two crude bombs were hurled in the incident, causing partial damage to a building. No casualties have been reported.
The men entered the plant through the second gate and asked the security personnel in the sentry post to open the main gate door. After they exploded one crude bomb inside the sentry post, causing partial damage, another crude bomb was thrown before escaping.
India: According to the Press Trust of India, Wonder Cement, part of RK Marble Group, plans to invest US$500m to increase its cement production capacity to 10Mt/yr in the next five years from the current 3.25Mt/yr.
"We have 3.25Mt/yr of cement manufacturing capacity at our Bhatkotri village plant in Rajasthan and have invested US$250m to double the current capacity to about 7Mt/yr by setting up a second production line. It is likely to be complete by the end of 2015," said Wonder Cement's executive director Jagdish Chandra Toshniwal.
Toshniwal added that Wonder Cement plans to further expand the current capacity to 10Mt/yr by setting up a third production line at a cost of US$250m in the next five years. The project will be funded through an internal accrual of US$47m, promoters' contribution of US$78m and debt of around US$376m.
Currently, the plant is running at full capacity and sells 1.8m bags/day to the northern states, with 50% of its volume sold in Rajasthan. Toshniwal said that Wonder Cement is also expanding its base in north Gujarat and western parts of Uttar Pradesh and Madhya Pradesh.
"The cement industry is evolving rapidly. We prepare for the next phase of the company's growth. We are focusing our efforts on increasing our market share by creating a clearly distinctive positioning in the market place," said Toshniwal. Some of the recent government initiatives such as development of 100 smart cities, housing for all by 2022 and post-monsoon commencement of several infrastructure projects are expected to provide a major boost to the sector, Toshniwal added.