Indian cement companies have a new suitor, Votorantim Cimentos. Taking a cue from their Mexican cousin Cemex, Brazil’s largest cement maker is on a prowl in India. The target companies are learnt to be J K group’s Lakshmi Cement and Mehta controlled Gujarat Sidhee and Saurashtra Cement. A team of officials the Brazilian cement major recently visited India and held initial talks with the target companies.
Early this year, $ 1.8bn Votorantim announced its plan to enter Asian markets by acquiring cement companies in India and China. It announced a 60 per cent increase in its overseas investment during 2005 to $220m (reports the local Economic Times).
Votorantim is the market leader in Brazil with a 40 per cent market share and installed capacity of 25Mt across 25 plants. The company owns five plants in North America and is a part of Grupo Votorantim, one of the largest industrial groups in Brazil. Industry sources say that there is now a greater a urgency among the foreign cement companies to acquire manufacturing capacities in India as the opportunities are drying-up.
"The Holcim-ACC deal has put pressure on other cement MNCs to speed their entry into one of the fastest growing cement markets in the world," says a senior official with a domestic cement major.
Votorantim’s push into India is greatly motivated by a relative stagnation in its domestic market. Cement consumption in Brazil is expected to grow by five per cent in 2005 after a paltry one per cent growth in 2004. In contrast, cement demand is projected to grow by 8-10 per cent in next financial year after a similar growth this year.
