Indian cement companies plan ready-mix concrete foray

Indian cement companies plan ready-mix concrete foray
Published: 27 May 2008

Barely a fortnight after the French cement major Lafarge acquired L&T Concrete, the ready-mix concrete (RMC) business of Larsen & Toubro (L&T), several domestic cement players have shown interest for foraying into RMC , which they see as a growth opportunity.
 
Binani Cement, Shree Cement and Dalmia Cement are among the new players who have plans to get into RMC business in one to five years.
 
“We are studying the viability aspect and hope to get into it in the next 18 months. It has a good future in India and we plan to foray organically with our own set up,” said Vinod Juneja, managing director, Binani Cement.
 
The company already has
ready-mix concrete unit at its Dubai plants. So with that expertise it would be easier for us to start our ready-mix concrete business in the country, he said.
 
At a time when ready-mix concrete, which constitutes not more than 3-4 per cent of total cement sales in the country, is expected to grow at 25 per cent per annum, cement manufacturers do not want to miss the opportunity. Foreign players – Holcim and Lafarge – have already established a firm foothold in the sector.
 
However, market players are cautious in diversifying into it saying that the
ready-mix concrete business still is in a nascent stage and will take time to mature and come at par with global level.
 
T Venkateshan, CEO, Dalmia Cement, said,
"Ready-mix concrete has a long way to go in the country and we may foray into it in a year’s time.” Demand forready-mix concrete is everywhere in the country, he added.
 
Grasim, along with its subsidiary UltraTech, is rapidly increasing its
ready-mix concrete network across the country. K C Birla, chief financial officer of UltraTech, had told Business Standard,.
 
North India-based Shree Cement too has expressed intentions for starting RMC business. “The 
ready-mix concrete market will take time to mature in the country. Unless a company has a countrywide presence, it’s difficult to compete. Let the market mature then in the next five years we will set up RMC plants,” said H M Bangur, chairman and managing director, Shree Cement.
 
Similarly, JK Cement’s Chief Financial Officer A K Saraugi said, “We have to study and explore possibilities how to go ahead with RMC. But any such initiatives would come only after completing our new cement plant in Karnataka.”
 
The working group on cement industry for the Eleventh Five Year Plan (2007-12) has stressed the need for setting up 
ready-mix concrete units.