In yet another consolidation move in the cement industry, the Jaypee group has struck a deal to acquire Gujarat Anjan Cement, which is implementing a 1.2Mt cement plant in Kutch, Gujarat. The financial details of the acquisition were not known. Gujarat Anjan is promoted by the Ahmedabad-based Sumaru group.
Sources said the Gaurs are acquiring the Gujarat company through Jaypee Cement, a Jaypee group company. Part proceeds from the group’s recently-floated E160m FCCB (foreign currency convertible bond) issue would be used for funding the acquisition. The Gujarat acquisition will help the Jaypee group get a foothold in the Western market. Besides, it would also help the group to get into exports as the Kutch plant will have easy access to ports on the Western coast.
This is the second acquisition by the Jaypee group this year, the first being the Rs 459-crore takeover of the 2.5m tonne UP State Cement Corporation’s asset plant in a hotly contested bid in January. In a related development, the group has also decided to set up a 1.5Mt greenfield cement project at Sidhi near Rewa, Madhya Pradesh. The project, expected to be commissioned by ’07-end, is estimated to cost about Rs 400 crore.
The acquisition of Gujarat Anjan Cement and the new greenfield project at Sidhi would raise the total cement capacity of the group to 15.2Mt, which is expected to catapult it to the third position from its current seventh position.
The group’s 3Mt greenfield cement plant in Himachal Pradesh is expected to go on stream in mid ’07. This would pave the way for the group’s foray into the up north markets of Punjab, Himachal Pradesh and parts of Haryana and J&K.
Sources said the group is also setting up two municipality solid waste (MSW) processing plants, one in Varanasi and the other in Chandigarh, which would produce pellets for its captive power plants at its Himachal and newly acquired UP Cement Corporation plants. Besides, Jaypee would also set up captive power plants at Sidhi and the newly acquired Kutch plant site.