Jaypee Associates have acquired the assets of UP State Cement Corporation in a hotly-contested bid. The acquisition of the 2Mt capacity units will cost the Gaurs Rs 459 crore (US$100m). Besides the Jaypee group, Lafarge and Dalmia Cement also participated in the financial bid, which opened on Monday. Dalmia Cement is learnt to have quoted a price of Rs 376 crore. Sources said the Aditya Birla group company Grasim, which was also in the race, had decided against participating at the last minute.
The UP State Cement Corporation has three plants located at Dala, Chunar and Churk in Mirzapur district. The reserve price for the financial bids was set at Rs 271 crore. The acquisition will make the Jaypee group the first company to have manufacturing facility in the state. The company currently has about 20 per cent market share in UP.
Besides, the acquisition will also help the group to increase its total cement production capacity to 9Mt from the existing 7Mt. The group has another 3Mt production capacity under implementation.
The Jaypee group will have to pump in a significant amount of funds to restart the operations of UP State Cement Corporation’s plants, which have been lying idle for several years now. The sale of the company, which had been under liquidation, was conducted by an asset sale committee set up under a court order.
The acquisition will give Jaypee Associates a strategic advantage as its current manufacturing facilities are located close to Reva in Madhya Pradesh. With the acquisition of this plant, the company can now further consolidate its position in the North Indian market. The group is currently setting up a greenfield cement plant in Himachal Pradesh.