Dalmia Bharat eyes ac­qui­si­tions as Bi­nani Ce­ment fate hangs in bal­ance

Business Standard - - COMPANIES - AVISHEK RAK­SHIT

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

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.