Displaying items by tag: UltraTech Cement

Consolidation in the Indian cement sector continued through December 2024. UltraTech Cement completed its acquisition of a larger stake in The India Cements late in the month. Then, this week, Nuvoco Vistas said that it was preparing to buy Vadraj Cement. Along similar lines, JK Lakshmi Cement also confirmed that it was moving ahead with the merger of its cement-related subsidiaries.

The UltraTech Cement deal was approved by its board of directors in July 2024 but it took until 24 December 2024 before it formally completed the purchase of an additional 33% stake in The India Cements. The deal was valued at around US$460m in mid-2024 by local press. UltraTech Cement now owns just under a 55% stake in the company and is its majority shareholder. Back in July 2024 UltraTech Cement said that The India Cements had a total production capacity of around 14.5Mt/yr of ordinary Portland cement (OPC). Just under 13Mt/yr of this is based in the south of the country, mostly in Tamil Nadu, and 1.5Mt/yr is in Rajasthan.

The Nuvoco Vistas announcement follows a bidding process to acquire Vadraj Cement through a corporate insolvency process. Key parts of the deal include taking control of Vadraj Cement’s 6Mt/yr grinding plant in Surat and its 3.5Mt/yr integrated plant in Kutch. Both plants are in Gujarat. The agreement also includes limestone mining rights in the state and a captive jetty near the Kutch plant. However, the expression of interest for the insolvency proceedings, published in March 2024, revealed that the company’s operations have been suspended for five years. The grinding plant and the jetty were described as ‘partially constructed.’ Nuvoco Vistas has not disclosed how much it had bid to pay for the company, although it was keener in its press release to state that the transaction would see it become the fifth largest cement producer in India. It says that its cement production capacity will rise to 31Mt/yr; 19Mt/yr of this in the east, 6Mt/yr in the north and 6Mt/yr in the west. Synergies are also hoped for when the new assets are combined with Nuvoco Vistas’ current plants at Nimbol and Chittorgarh in Rajasthan.

Compared to the previous two news stories, the JK Lakshmi Cement merger plan is on a smaller scale but it follows the same trend. The cement producer presented its corporate restructuring plan to its shareholders in July 2024. It wants to merge JK Lakshmi Cement, its main cement company, with Udaipur Cement, Hidrive and Hansdeep. JK Lakshmi Cement runs two integrated cement plants at Sirohi, Rajasthan, and Durg, Chattisgarh respectively. It also operates what it calls ‘split location grinding’ plants at Kalol and Surat in Gujarat, at Jhamri in Haryana and at Cuttack in Odisha. Udaipur Cement operates one integrated plant in Rajasthan, Hidrive owns land next to the group’s Surat unit and Hansdeep is a preferred bidder for limestone resources in Nagaur, Rajasthan. The group’s clinker and cement production capacities are 10Mt/yr and 16.4Mt/yr. Its rationale is to gain synergies from production, distribution and logistics, to simplify the corporate structure, to improve efficiency and to raise shareholder value. That last one might be particularly useful for a cement producer looking to expand or sell in the future.

Further mergers and acquisitions are expected to happen in 2025 but at a slower rate than in 2024. Part of the dynamic so far has been that the highest demand is in the east and the highest capacity is in the south. Many of the deals announced in 2024 focused on markets in the south of the country. By contrast, analysts quoted in the Economic Times at the start of 2025 anticipate that new transactions might start to move to other regions. Obvious potential targets include Jaiprakash Associates and Heidelberg Materials. The first company became insolvent in 2024 and is likely to be sold off. Rumours of a potential purchase of the second company by Adani Group in the autumn hit the local press in October 2024. Doubtless there are other less visible possibilities too if the price is right. Read Global Cement Weekly in 2025 to find out what happens.

India: The India Cements has appointed Suresh Vasant Patil as its CEO. Krishnagopal Ladsaria has also been appointed as chief financial officer (CFO).

Patil joined the Aditya Birla group as a management trainee in 1988 and has over 35 years of professional experience. His most recent role was as the head of the Ready-Mix Concrete, Key Accounts and Building Product Division at UltraTech Cement. Patil trained as a civil engineer with qualifications from Karnataka University.

Ladsaria is a qualified chartered accountant. He has worked with companies including AF Ferguson, Grasim industries, Hindalco Industries and Century Enka. Recently he held the post of CFO at Century Enka, a subsidiary of Aditya Birla.

UltraTech Cement, part of Aditya Birla Group, took control of The India Cements in late-December 2024 when it completed its acquisition of shares. It now controls around a 55% stake in The India Cements.

India: UltraTech Cement has acquired an 8.69% stake in Star Cement for US$99m, at US$2.74/share. According to The Hindu Businessline, this minority stake acquisition could lead to UltraTech Cement eventually buying out Star Cement entirely, similar to its previous acquisition of India Cements on 20 December 2024.

India: UltraTech Cement has begun transporting mineral gypsum via National Waterway 1 (Ganga-Bhagirathi-Hooghly river system) in a pilot project supported by the Inland Waterways Authority of India and Inland & Coastal Shipping, a Shipping Corporation of India subsidiary.

The consignment is being shipped from Haldia port, West Bengal, to the Gaighat terminal in Patna, Bihar. It will then be transported to UltraTech’s Pataliputra Cement Works grinding unit in Bihar. UltraTech is reportedly the first Indian cement company to utilise National Waterway 1 for large-scale gypsum transport, with the aim to cut CO₂ emissions and ease congestion on roads and railways.

India: Aditya Birla subsidiary UltraTech Cement is reportedly considering issuing bonds worth US$118m. Informist MoneyWire News has reported that the issuance may take place later in November 2024.

India: Aditya Birla plans to expand its production capacity by 28% from 156Mt/yr to 200Mt/yr before 2035. Group chair Kumar Mangalam Birla told the Hindustan Times Leadership Summit in New Delhi that scale is key to long-term survival, and that he always aims for his group to be a leader in any given industry in which it operates.

Domain-B News has reported that Birla said "It took the group 36 years to build a 100Mt/yr cement capacity, while it added another 50Mt/yr capacity in five years.”

India: UltraTech Cement has entered a new transport service contract to deploy about 100 electric vehicles for the transportation of 75,000t/month of clinker from its cement plant Dhar Cement Works in Madhya Pradesh to its grinding unit Dhule Cement Works in Maharashtra, 200km away. This expansion aims to reduce CO₂ emissions by 17,000t/yr. The initiative follows a successful pilot launched in January 2024, in which the company deployed five electric trucks for the transport of clinker on this route, as well as the deployment of charging infrastructure and training. UltraTech is evaluating additional routes for further electric truck deployment and plans to conduct another pilot with a similar model. The company aims to increase its electric truck fleet to 500 by June 2025 as part of India's eFAST initiative.

India: UltraTech Cement announced plans to make a private placement of non-convertible debentures (NCDs) on 12 November 2024. MarketLine News has reported that the value of the proposed placement as US$356m.

India: The India Cements’ revenue fell by 24% year-on-year to US$244m in the six months to 30 September 2024 from US$320m in the same period in 2023. Its reported loss grew to US$33.3m from US$19.8m. Sales volumes declined by 15% to 4.26Mt from 5.04Mt. The company’s performance was negatively affected by weak cement demand and a significant decline in prices, according to the Hindu newspaper. It also said that is was unable to benefit from lower fuel costs, particularly petcoke, as lower sales volumes reduced its margins. The cement producer was purchased by UltraTech Cement in July 2024.

India: UltraTech Cement has entered a collaboration agreement with the Institute for Carbon Management (ICM) at the University of California (UCLA) to develop new technology that aims to reduce carbon dioxide emissions from cement production. The partnership will see the construction of a demonstration plant at one of UltraTech's integrated cement plants. Further details on the technology are available in Global Cement’s news story from 15 October 2024.