Emami Group to sell cement biz to Nirma unit

MUMBAI: Emami Group agreed to sell its cement business to Nuvoco Vistas Corp. Ltd, a Nirma group company, for an enterprise value of ₹5,500 crore, as the founders of the Kolkata-based company seek to pare debt.

The transaction is expected to be completed in the next threefour months, Emami said in a statement on Thursday.

The sale of the cement business is part of Emami group’s plan to become debt-free. Last year, the group’s founders sold 20% in their flagship household goods company, Emami Ltd, for ₹2,830 crore as part of the plan.

Emami Cement Ltd operates an integrated cement plant in Risdah, Chhattisgarh; and grinding units in Bihar, West Bengal and Odisha, with a total installed capacity of 8.3 million tonnes per annum (mtpa). It has mining leases in Chhattisgarh, Rajasthan and Andhra Pradesh.

“This transaction is an important step in our group’s stated objective of becoming debt-free and with this transaction, we will substantially achieve this objective,” said Manish Goenka, director of Emami Group. “We are very proud of Emami Cement’s achievements in a short span of time and we strongly believe that in Nuvoco, we have found the right acquirer who will be able to develop the business further in the interest of all the stakeholders.”

This is Nirma’s second cement acquisition in east India. In 2016, Nirma acquired Lafarge India’s cement assets at an enterprise value of $1.4 billion. Lafarge India operated three cement plants and two grinding stations with a total capacity of around 11mtpa. The Emami cement acquisition will bring Nuvoco’s total cement capacity in eastern, northern and western India to 23.5mtpa.