Cimpor plans Indian acquisition?

Cimpor plans Indian acquisition?
Published: 17 June 2004

In what could signal another step forward in the consolidation of the Indian cement sector, Cimpor has appointed merchant bankers HSBC Securities and KPMG to identify acquisition targets within India. Industry sources said merchant bankers acting on behalf of Cimpor have kicked-off the process of initiating a dialogue with prospective cement manufacturers to work out an acquisition/strategic alliance, although talks are in "preliminary stages." Though no confirmation is available, industry observers say the local cement companies on Cimpor’s radar could include Birla Corp, the MP Birla group-controlled cement maker, Mangalam Cements and Mehta group companies, Saurashtra Cement and Gujarat Sidhee Cement.  "We would like to clarify that there have been no talks - direct or indirect - with Cimpor," said a top Mehta official.

For Cimpor, which operates in eight countries - Portugal, Spain, Morocco, Tunisia, Brazil, Mozambique, Egypt and South Africa - an entry into India will be its debut in Asia. So far, only two multinationals - Lafarge and Italcementi - have made their debut in India.. Local demand is pegged to grow 8-10% in the current fiscal. While Lafarge has a capacity of 5Mt through two high-profile acquisitions (Rs 550 crore for Tata Steel’s cement business and Rs 785 crore for Raymond’s cement business) in eastern India, Cement Francais, a subsidiary of Italcementi, has been gaining ground in South India through Zuari Cement, its 50:50 JV with the KK Birla group.