Dalmia Bharat eyes acquisitions as Binani Cement fate hangs in balance
Keen to enter the North Indian cement market with the fate of Binani Cement hanging in balance, Dalmia Bharat is now weighing options such as acquisition of other cement companies or units in the region.
Indrajit Chatterji, executive director of sales and marketing for the eastern zone at Dalmia Bharat Cement, said, “The expansion may be in terms of acquisition.”
According to B K Singh, Dalmia Bharat's senior executive director of group marketing and communication, it has been the company's objective to emerge as a pan-India player and not limit itself to certain geographies. Although the company's consolidated production capacity stands at 26 million tonnes per annum (mtpa) currently, it is limited to the south, east and northeast.
Singh said wherever the company has been operating, it has a sizeable presence with a good market share. "When we enter any new geography, we want a significance presence,” he added.
Due to this reason, Dalmia Bharat had been adamant on its acquisition plan for Binani Cement, which would have opened an available market, giving it a sizeable presence with a 6.25 mtpa plant in Rajasthan.
It emerged as the H1 bidder in the insolvency process of Binani Cement. Its plans took a hit after UltaTech Cement, the hitherto unsuccessful bidder, mounted its opposition to the takeover. Now, after a prolonged series of litigations, the fate of Binani Cement remains undecided.
Acquisition has been a key strategy for the company in scaling up its business and entering new geographies. Last year, it acquired Kalyanpur Cements, which has the only integrated clinker capacity in Bihar, thus marking its foray into the state.
Now, Dalmia Bharat is the only cement company that owns at least one plant in each of the four eastern states comprising West Bengal, Bihar, Jharkhand, and Odisha. It commands a 15 per cent market share in the east, making it the second-largest cement company in this zone, while its consolidated market share in South India is 11-12 per cent.
Its strategy to enter West India has been successful after it acquired the 3 mtpa stressed assets of Murli Cement, which will open up Maharashtra for the company.
Dalmia Bharat is the only cement firm that owns at least one plant in each of the four eastern states comprising West Bengal, Bihar, Jharkhand, and Odisha