India: Jaypee Cement eyes acquisition

Jaypee Cement (JC), the country’s third-largest producer (Jaiprakash Associates/Japyee Group), is looking at an acquisition, having recently dumped its plan to sell off its Gujarat plant.

“In the near future, the group plans to expand its cement capacities via acquisitions and greenfield additions to maximise economies of scale and build on vision to focus on large-size plants from inception,” said Ashutosh Kumar, JC’s joint president of marketing.

Before that, though, JC would be concentrating on stabilising production at some of its recent acquisitions and raise production there.

“The two Andhra Cement plants acquired recently have started production with initial supplies to natural logistics market of Andhra Pradesh and Orissa.

Re-commissioning of the Gulbarga plant in Karnataka has been completed on schedule and it is likely to start production very soon,” said Kumar.

Once that happens, JC’s total cement capacity would rise to 39.9Mta from the present 37.3Mta.

Media reports earlier said Aditya Birla group-owned UltraTech Cement was in talks to buy JC’s 4.8Mta plant in Gujarat. Irish building materials group CRH had also gone on record last year saying it had talks with JC for buying an equity stake in the plant.

“We were in discussions with some parties. But as of now, we’re comfortable in terms of cash position. So, we’re not selling any of our cement units,” said Kumar.

JC has 12 integrated cement plants, 11 grinding units and two blending plants spread across country. The cement business generated revenue of close to INR120bn (US$2bn) in 2012-13. It is expected to grow by 15-16 per cent this fiscal, said K Swaminathan, JC's commercial president.