As part of its strategic plan to exit non-cement businesses, ACC on Wednesday reached an agreement with ICICI Venture Funds to sell off its refractory business in what is possibly the largest 100 per cent buyout by a private equity fund in India. ACC chairman Tarun Das told shareholders at the company’s annual general meeting that ACC-which is now controlled by the Holcim-Gujarat Ambuja Cements combine-would stay focused on cement and concrete, and non-core businesses would not form part of its long-term growth plan.
“The refractories business was clearly not our core business. We would focus only on cement and concrete and look at ways to increase our marketshare,”e told shareholders. The company’s board, which on Wednesday, ratified the financial results of the quarter ended June ’05, has also decided to change the financial year to January-December as against April-March currently, with a view to aligning its operations with Holcim. As a result, the current fiscal would be a nine-month period ending December ’05.
On Wednesday, ACC announced a 72 per cent rise in net profit for the quarter ended June 30, 2005 compared to the corresponding three month-period last year, backed by improved realisations and higher volumes. Sales turnover rose 19 per cent to Rs 1,128.3 crore, while sales volume jumped 13 per cent from 3.9Mt to 4.4Mt during the period.
Markus Akermann, the CEO, of Holcim, wants ACC to grow cement capacities through de-bottlenecking at its existing plants. “India is among the fastest growing markets for cement. We would expect ACC to grow by 8-10 per cent,”he said. Akermann was, however, non-committal on whether Holcim-controlled Ambuja Cement India-which holds 34.7 per cent in ACC-would increase its shareholding further. “We are happy with our current stakes” was all he had to say.