Ultratech Cement Joins Race To Buy Heidelberg Cement
UltraTech Cement, an Aditya Birla Group flagship, and the country’s second-largest cement producer, Adani Cement, may join the race along with Parth Jindal-led JSW Cement to acquire Heidelberg Cement, put on the block by its parent Germany-headquartered Heidelberg Materials. Heidelberg has a cement manufacturing capacity of 13.4 million tonnes per annum across its plants in Damoh (Madhya Pradesh), Yerraguntla (Andhra Pradesh), Sitapuram (Telangana), Ammasandra (Karnataka), Jhansi (Uttar Pradesh), Sholapur (Maharashtra), Chennai (Tamil Nadu), and Cochin (Kerala). Though JSW Cement has initiated unsolicited talks with the global building material company, Heidelberg’s India exit strategy would involve a detailed bidding process, said a source close to the development. Moreover, the Indian subsidiary of Heidelberg Materials is a listed entity, and it has to follow the due process laid out by SEBI for protecting investor interests, the source added. Foreign-owned cement companies are increasingly finding it difficult to operate in India, the world’s second-largest market, due to increasing competition and their compulsion to spend heavily on decarbonisation projects. Kumar Mangalam Birla-led UltraTech plans to enhance capacity to 200 mtpa from 138 mtpa. The company has doubled its grey cement production capacity from 66.3 mtpa in FY16 to 132.4 mtpa in FY23. Work has already commenced on the next growth phase of 22.6 mtpa additional capacity with an investment of ?13,000 crore. On the other hand, billionaire Gautam Adani-led Adani Cement acquired Switzerland-based Holcim-owned Ambuja Cements and ACC in India and emerged as the second largest cement producer from nowhere. Both Ambuja and ACC together have a capacity of 73 mtpa and plans to take it up to 140 mt by FY’28. The debt-free companies generate revenue of ?40,000 crore and expects sales to grow 18-20 per cent annually. Interestingly, Heidelberg Materials itself grew its presence in the domestic market with acquisitions after entering India in 2006. The group acquired majority stakes in Mysore Cements and Cochin Cements. In 2008, it bought out Indorama Cement joint venture to make its presence felt. It further increased capacity by 3 mtpa in Central India through brownfield expansion in 2013. With the acquisition of Italcementi in 2016, the group more than doubled its installed capacity, making it one of the top 10 players in India. It sells under the Mycem and Zuari brands.
Tags : UltraTech Cement Aditya Birla Group flagship country cement producer Adani Cement Parth Jindal JSW Cement acquire Heidelberg Cement Germany Heidelberg Materials