Raysut Cement of Oman plans to invest US$700m in the Indian cement market by 2022. The cement producer intends for approximately US$200m of this total to be invested in acquiring majority stakes in two Indian cement producers in 1Q19.
The investment is part of the cement producer's plans to expand its overall production capacity to 20Mta, while the Muscat Securities Market-listed firm is also scouting for acquisitions in Africa, according to the Hindu Business Line.
"We are in discussions to invest in two existing cement companies, one of them in Chhattisgarh and the other in Gujarat's coastal region. We will invest a total of US$200m in these two companies by the first quarter of calendar 2019 and acquire a controlling stake of about 75 per cent," said Joey Ghose, Raysut Cement CEO.
"Further, we will invest another US$400-500m to expand these companies’ businesses over the next four years, based on certain milestones," he added. Both of these are small firms with 1.2Mta capacities, and following the investments their capacities will be increased to 5Mta by 2022.
The company intends to sell its products from the Gujarat plant in the domestic market. In case there is surplus production, it may look to export to Sri Lanka. However, Chhattisgarh being land-locked, the produce will be sold only in the domestic market.
Global ambitions
Raysut Cement is also preparing to acquire a 70 per cent stake in Kenya’s ARM Cement with an estimated US$100m investment. It is also in discussions to acquire various cement producers in Uganda and Djibouti, and is planning to build a 1Mt cement plant in Berbera, Somalia. The company also holds a majority stake in Pioneer Cement Industries Georgia.
With this expansion programme the company intends to more than triple its production capacity to 20Mta from the present 6Mta.
