Gujarat Ambuja Cement has plans to go global. The cement major is exploring opportunities to set up operations in the Middle East and European region.
Sources familiar with the development told Business Standard, “The company is looking at either setting up manufacturing facilities in the Middle East or buying out some existing units. It may join hands with some local partners to set shop abroad.”
Gujarat Ambuja has received some proposals from European players in this regard, sources pointed out. If successful, Gujarat Ambuja will be the first domestic cement company to have a base outside India. “Selling cement under the Ambuja brand in the overseas markets is also a part of the overseas expansion plans,” sources said.
Explaining the rational behind the move, sources said, “Cement demand in the Middle East is expected to grow at a very healthy rate due the upcoming construction boom in the region, therefore, the company wants to establish a strong presence in these markets.”
Gujarat Ambuja currently exports cement to the Middle East from its Gujarat plant. “The company is looking at larger exports to the Middle East in the coming years,” said a senior company official. Gujarat Ambuja is currently the largest exporter of cement in the country, with exports of around 1.8Mt during the year ended June 30, 2004, accounting for 15 per cent of total cement exports.
Gujarat Ambuja recently announced that it would target a domestic installed capacity of 20Mta in the next three years. The company is eyeing acquisition targets in the north-western region in the country.
“We are looking at a production capacity of 20Mta by the end of the next three years. While the growth in capacity will come mainly through acquisitions, we could look at brownfield expansion if we are not able to achieve the set targets through buyouts alone,” the company official added.