Nirma Cements

Nuvoco Vistas Ltd ( formerly called Lafarge India)

During July of 2016 the Gujarat based detergent and chemical major Nirma, astounded the Indian Cement Industry by outbidding rivals JSW Cement & Piramal Enterprises to acquire the Lafarge India business which has a total capacity of approx. 11 million tonnes per annum.

Ahmedabad based billionaire industrialist Karsanbhai Patel who founded the Nirma Group is betting heavy on the  Indian cement sector and is gearing up for a massive IPO of its cement arm Nuvoco Vistas Ltd ( formerly called Lafarge India) which houses the Lafarge assets. This is seen by cement industry insiders as part of its next major move in the cement segment after the $1.4bn buyout of Lafarge India's assets in 2016.

Nuvoco Vistas Ltd ( formerly called Lafarge India), has six plants in Chhattisgarh, Rajasthan, Jharkhand, Bengal and Haryana presently running at 95 % cement capacity utilization. In addition to the six plants, the standalone cement unit in Rajasthan has a capacity of around 2 MPTA.

Care Ratings independent cement sector update released earlier in May 2018, states "with two major states (Rajasthan and Madhya Pradesh) going into Assembly elections followed by General Elections in 2019, the demand from infrastructure and construction is expected to peak in the central, eastern and western regions of India. Utilization in cement capacity across regions is expected to improve during the year to around 67%. Housing and real estate segment demand is expected to grow by around 6-7% whereas demand from Infrastructure segment is expected to grow by 8-10%."

Jaypee Group To Divest Cement Business

Jaypee Group In Talks With JSW Cement With New Offer

Around eight months ago, the Jaypee Group had initiated talks with JSW Cement, a private company of the diversified Sajjan Jindal lead JSW Group to sell its entire approx. 22 MPTA cement portfolio. At that time, sources say the offer was to sell a controlling 51 per cent stake in a joint venture that would keep majority control of its cement units with the Jaypee Group. The talks did not come to any tangible conclusion.

Now, informed sources say, Jaypee has gone back to JSW cement with a new proposal that calls for a complete sellout of its cement business. Though, some sources say that Jaypee is likely to exclude its first cement plant located in Rewa, Madhya Pradesh, from the proposed sale.

Inspite of divesting around 9 MPTA of cement capacity to other cement companies like UltraTech Cement (4.8 MPTA), Shree Cement (1.5 MPTA) and Dalmia Cement (2.1 MPTA), as well as its current efforts to divest an additional 4.9 MPTA in Madhya Pradesh to UltraTech, the Delhi-based Jaypee Group group is still among the top five cement players in the country.

The Jaypee Group's has cement units in Uttar Pradesh, Himachal Pradesh, Andhra Pradesh, Chhattisgarh and Karnataka. The group's flagship company,Jaiprakash Associates (JPA), has approximately 14.2 MPTA, under its wing. The rest, including the 5 MPTA Balaji Cement, are under subsidiaries, joint ventures or group entities.

More on Cement Business Aquisition here...