![](/templates/proglobalmedia-main/images/globe-blue-whitebg.gif)
Displaying items by tag: India
India: JK Lakshmi Cement’s full-year consolidated sales were US$697m in its 2022 financial year, up by 14.6% year-on-year from US$608m in the 2021 financial year. The group’s net profit was US$61.5m, up by 13.4% from US$54.2m.
The producer said "Despite unabated increases in petcoke and diesel prices, which are hovering at all-time high, JK Lakshmi Cement was able to achieve healthy profitability through continuous improvements in operational efficiencies, energy costs, better product mixes and higher volumes."
Dalmia Bharat Foundation signs memorandum of understanding to train 600 young people annually
19 May 2022India: Dalmia Bharat Foundation has signed a memorandum of understanding with Bokaro Steel Plant for the training of 600 new young people from Bokaro every year. Under the initiative, the partners will run short, placement-based courses at the DIKSHa (Dalmia Institute of Knowledge and Skill Harnessing) centre.
Dalmia Bharat Foundation CEO and Dalmia Bharat group head - corporate social responsibility Vishal Bhardwaj said “Since our inception in 2009, we’ve witnessed our role gradually transform from being a resource provider to a key enabler for positive change in society. While we’ve created a legacy of development and change for the better, we continue to strive to ensure that we meet newer economic and environmental needs and close wider societal gaps as much as possible.”
Holcim agreed to sell its Indian assets to Adani Group this week for US$6.37bn. These include Holcim’s stakes in its local subsidiaries Ambuja Cement and ACC. The deal, if approved by the local competition body, should complete in the second half of 2022. This is one of the larger sales of cement company assets over the last decade. Adani Group, an Indian-based conglomerate with businesses across energy, transport and more, is now poised to become the second largest cement producer in India.
Global Cement Weekly previously covered a potential sale of Ambuja Cement and ACC in April 2022 when the story that Holcim was looking for a buyer first emerged in the Indian press. At the time local press speculated that the sale could generate as much as US$15bn for Holcim. So it is interesting to see that a figure of US$6.37bn has been agreed upon instead, less than half of the speculative figure. Roughly, as ever, this places a value of a little below US$100/t of cement production capacity. This seems like a relatively low pricing for these plants by international standards over the last decade. However, this doesn’t take into account many factors such as, for example, the condition of the plants, Holcim’s desire to change its business, the ease of selling up in India all in one go, other non-cement assets and so on. For Adani Group though, buying into heavy building materials production in a large market like India clearly seemed attractive. It is also worth noting that, similar to other cement sector acquisitions recently, here again is a buyer with a background in another carbon-heavy industry buying into another heavy emitter.
Acquirer | Divestor/target | Year | Value | Cement production capacity | Price for cement capacity | Region |
HeidelbergCement | Italcementi | 2016 | US$7.0bn | 70Mt/yr | US$96/t | Europe, Africa, Middle East |
CRH | Lafarge and Holcim | 2015 | US$6.9bn | 36Mt/yr | US$192/t | Europe, Americas, Asia |
Adani Group | Holcim | 2022 | US$6.4bn | 66Mt/yr | US$97/t | India |
CRH | Ash Grove | 2018 | US$3.5bn | 10Mt/yr | US$350/t | US |
UltraTech Cement | Jaiprakash Associates | 2017 | US$2.5bn | 21Mt/yr | US$119/t | India |
Smikom | Eurocement | 2021 | US$2.2bn | 50Mt/yr | US$44/t | Russia, CIS |
Semen Indonesia | LafargeHolcim | 2019 | US$1.8bn | 12Mt/yr | US$150/t | Indonesia |
CSN | Holcim | 2021 | US$1.0bn | 9Mt/yr | US$111/t | Brazil |
Table 1: Selected large scale acquisitions of controlling shares in non-Chinese cement production assets since 2012. Source: Global Cement news and company releases. Italcementi acquisition value reported by Reuters.
Table 1 above provides some historical context to Adani Group’s agreed acquisition by comparing it to other large completed deals in the cement sector over the last decade. Don’t forget that it is only looking at this from the cement sector. This list excludes changes in ownership in the Chinese cement companies in this period because, generally, there has been a government-driven consolidation in the industry through mergers rather than large-scale acquisitions. So, for example, the world’s current biggest cement producer CNBM had a reported production capacity of 350Mt/yr in 2012 and this rose to 514Mt/yr in 2020 as it absorbed other state-owned companies. The big merger it underwent during this time was with China National Materials (Sinoma) in 2018, primarily an engineering company that also produced cement.
The most obvious trend in Table 1 is the journey of Lafarge and Holcim from their merger in 2015 and the gradual realignment of the business subsequently. During this time the company has sold up in large markets outside of its core regions in Europe and North America. Latterly, it has also started to diversify away from heavy into lightweight building materials. One notable ‘nearly happened’ was LafargeHolcim’s attempt to sell its business in the Philippines to San Miguel Corporation for US$2.15bn in 2019. That deal collapsed when the Philippines Competition Authority failed to approve it within a year of its proposal. CRH enlarged itself from assets sold during the creation of LafargeHolcim and then picked up Ash Grove in the US in 2018. CRH’s head Albert Manifold memorably said in 2018 that his company was focusing on markets in developed countries and CRH’s large-scale acquisitions have largely followed this.
As for the others, HeidelbergCement’s purchase of Italcementi in 2016 almost appeared as a riposte to the formation of LafargeHolcim, albeit on a slightly smaller scale. It confirmed HeidelbergCement’s place as the world’s second largest non-Chinese cement producer. It is also one of the minority of truly multinational acquisitions on this list. Unlike LafargeHolcim and now Holcim though, HeidelbergCement hasn’t exhibited a desire to downsize or diversify at quite the same speed. UltraTech Cement’s acquisition of Jaiprakash Associates in 2017 confirmed its place as the largest Indian producer. That deal was publicly one of the longer lasting one as it originally started out in at least 2014 on a smaller scale and was later slowed down by the Mines and Minerals (Development and Regulation) (MMDR) Amendment Act. Smikon’s purchase of Eurocement in 2021 almost looks like part of the isolation of the Russian economy, especially with the benefit of hindsight given by the invasion of the Ukraine in early 2022.
Mega-deals have lots of moving parts but two of the most tangible to broader audiences are the price and the timing. Cemex infamously got both of these wrong with its acquisition of Rinker in 2007 as it paid high just as the US subprime mortgage crisis started a wider global financial one. This was despite Cemex’s emergence over the previous 15 years as a multinational force to be reckoned with due in part to the so-called ‘Cemex Way’ approach to management, acquisitions and integration. Clear winners from the big acquisitions over the last decade are harder to spot but CRH and UltraTech Cement look strong so far. Adani Group has certainly picked a lively time to make a purchase on this scale following a global pandemic with ongoing global supply chain issues and disruptions to energy and food markets.
India: Star Cement's full-year 2022 financial year sales were US$286m, up by 29% year-on-year from US$222m. Its net profit rose to US$31.8m, up by 32% from US$24.2m. The producer recorded total costs of US$259m, up by 36% year-on-year from US$191m. Raw materials costs rose by 45%, power and fuel expenses rose by 23% and transport costs rose by 34%.
During the year, the company bought back 2% of its shares, at a total cost of US$16m.
Cement Corporation of India begins equipment tendering process for Adilabad cement plant shutdown
18 May 2022India: Cement Corporation of India has called for e-tenders for its mothballed Adilabad cement plant's equipment for a sale of the plant's assets prior to its permanent closure and decommissioning. The state-owned company will receive offers until 23 May 2022 and will open bids after 120 days. The New Indian Express newspaper has reported that a planned airport will take up some of the land currently occupied by the plant in Telangana.
The US$7.73m Adilabad cement plant was operational between 1982 and 1998. It reportedly has sufficient limestone reserves to continue cement production until 2122.
India: UltraTech Cement has successfully commissioned a second clinker line with a capacity of 2.7Mt/yr at its Hirmi cement plant in Chhattisgarh. The company says that it is on track to also commission a new 1.3Mt/yr grinding unit at the plant in mid-2022.
Adani Group to acquire Holcim India
16 May 2022India: Holcim has agreed to sell its Indian business to industry, energy and ports conglomerate Adani Group for US$6.37bn. The assets consist of a 63% stake in Ambuja Cement, which in turn owns 50% of ACC, and a 4.5% direct stake in ACC.
ACC and Ambuja Cement employ 10,700 people and operate 31 cement plants in India. The deal will make Adani Group India’s second-largest cement producer.
Chair Gautam Adani said "With Holcim's global leadership in sustainability, we are acquiring some of the most efficient building materials operations in India, powered with clean technologies like heat recovery systems. We recognise that Ambuja and ACC operations are energy intensive and therefore, when combined with our renewable power generation capabilities, we gain a big head start in the decarbonisation journey that is a must for Indian industry."
Holcim says that its focus is now on expanding its solutions and products business. Reuters News has reported that the group plans to put the proceeds of the assets’ sale towards lower-carbon acquisitions. Its Indian operations contributed 26% of group CO2 emissions.
Chief executive officer Jan Jenisch said "We will always make cement, but we will decarbonise cement.” He added “We are happy to build up other segments like building solutions and products."
India: Chettinad Cement has ordered a MVR 5600 R-6 type mill for raw meal grinding and a MVR 5300 C-6 type mill for grinding composite cements from Germany-based Gebr. Pfeiffer for a new production line at its integrated Kallur plant in Karnataka. The supplier says that the MVR 5600 R-6 type mill is the first of its kind provided with six rollers. The order was placed in April 2022 and the contract has since been activated with the receipt of down-payment and a letter of credit.
The core components of the MVR mills as well as the 5810 kW gearbox will be supplied by Gebr. Pfeiffer SE from Europe. Foundation parts, housings and other components will be manufactured in India and delivered to the customer under responsibility of its subsidiary Gebr. Pfeiffer (India). The office of Gebr. Pfeiffer (India) in Noida, near New Delhi, will also support the end customer in plant design, procure most of the grinding plant machinery such as filters, fans, hot gas generators, the fly ash handling and conveying aggregates, and will be on site with personnel for quality control of the customer's site fabrication as well as supervision of erection and commissioning.
India: Dalmia Bharat sold 22.2Mt of cement in its 2022 financial year, up by 7.2% year-on-year from 20.7Mt in the 2021 financial year. During the year, Dalmia Bharat recorded earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$314m, down by 11% year-on-year from US$356m in the 2021 year. The producer says that it is 'on track' to achieve a capacity of 48.5Mt/yr by the end of the 2023 financial year.
Speaking about the company's fourth-quarter 2022 financial year performance, managing director and chief executive officer Mahendra Singhi said "Through proactive cost containment measures, our teams have successfully mitigated the adverse inflationary impact and delivered one of the lowest total cost per ton of cement alongside a volume growth in-line with the industry. The recent strong recovery in demand and prices across all our operating regions is highly encouraging." Singhi continued "While the margins may continue to remain under pressure, we are undertaking proactive measures to retain our cost leadership and deliver sustainable earnings growth."
India: Dalmia Cement (Bharat) plans to invest US$38.9m in an upgrade to 2.5Mt/yr Belagavi cement plant. The work will consist of a capacity expansion and the installation of a new 9MW solar power plant at the facility. The latter is expected to halve the plant's grid electricity consumption. When commissioned in March 2024, the expanded plant will directly and indirectly employ 700 additional people.