Heidelberg hungry for more in India?
Hot on the heels of its Mysore Cement acquisition, German major HeidelbergCement is now planning to further increase its presence in India, a senior executive recently said, according to reports from The Economic Times (ET) of India.
"After our first step with Indorama, the planned majority takeover in Mysore Cement was vital," HeidelbergCement chairman Bernd Scheifele told ET. "In March, we had mentioned that the approval procedure for a clinker plant in Gujarat has been started.
Further expansion will also be taken step by step." HeidelbergCement has a joint venture with Indorama for a cement grinding unit. Early this month, HeidelbergCement bought a majority stake in SK Birla’s Mysore Cement for $100m and is currently in the process of making an open offer to the Indian company’s shareholders.
Sources in the Indian cement sector said after Mysore Cement, HeidelbergCement could be looking at other local units also. "They may initiate the consolidation process once the Mysore Cement open offer is completed and its other expansion plans are in place," the sources added.
The move is also in line with the German major’s plan of having close to 5-10Mt cement production capacity in India. HeidelbergCement currently has a capacity of 3.5Mt, including Mysore Cement’s 2.6Mt. HeidelbergCement is expected to merge all its holdings in India into a single entity, which suggests that the German company will be keen on picking up majority stakes in all future acquisition targets.
Mr Scheifele was non-committal. "The takeover of the majority (stake) in Mysore is ongoing. Further activities will be taken step by step." But Mr Scheifele is confident India would see large-scale consolidation. "The cement industry worldwide is experiencing a consolidation process. I expect a similar trend in India also. The speed cannot be predicted," he said.
[Extracted from The Economic Times of India]
Published under Cement News
