Cemex heading for India?

Cemex heading for India?
Published: 02 May 2006

Cemex is apparently looking at India as one of the opportunity markets for future growth. As and when the move materialises, the world’s top five global cement manufacturers will be present in the burgeoning Indian market. In a forward-looking statement after announcing the company’s results last weekend, the chairman of the Mexican company, Lorenzo Zambrano, said that along with China, Russia and Brazil, India had a "great future potential " because of its enormous size. He added, "We have no presence (in India), so that is an opportunity for us in the future."
 
The chairman’s statement confirms the buzz in the Indian cement industry regarding the Mexican company’s inevitable entry into the domestic cement industry. This was given further credence after HeidelbergCement, the world number four, entered the market in a joint venture with Indorama Cement.
 
In fact, between 2002 and 2004, Cemex had twice opened talks with the BK Birla Group to acquire the latter’s Mangalam Cement. However, differences over valuations hampered the talks.
 
Post the Holcim-Gujarat Ambuja Cement (GACL) deal earlier this year, valuations are running high in the Indian cement sector. "It is only after a decade that the Indian industry is seeing good times with record prices and high demand. So though there might be willing sellers, it won’t come cheap for Cemex," pointed out an industry expert. While none of the industry obervers is willing to hazard a guess, fingers are pointed at the smaller units as the potential targets for Cemex.