January 17, 2012

Stock: Dalmia Cement~ Sector: Cement

Source: Financial Express

• Dalmia Bharat Enterprises said on Monday that Dalmia Cement Bharat (DCBL), its subsidiary, has picked up 50% stake in Assam-based Calcom Cement India for an investment of R238 crore.
• Calcom Cement plant is a privately-held company and Assam Industrial Development Corporation (AIDC) is believed to be holding a little over 10% stake in the company. Apart from this, Calcom also has some foreign investors.
• At present, Calcom Cement India is expanding its consolidated cement manufacturing capacity to 2.1 million tonnes per annum.
• DCBL said that the investments would be made through a combination of new issuances and acquisitions and subject to the various terms and conditions set out in the definitive documentation.
• Amit Chaudhery, group corporate communications, Dalmia Bharat Group, said, DCBL has arrived at an in-principle agreement with Assam-based Calcom Cement for a 50% stake in that company. Calcom Cement has a robust presence in markets of the northeast.
• The 50% ownership of this 2.1 million tonne semi-commissioned plant will come at an investment of R238 crore and is a first concrete example of the non-organic, acquisition-based growth strategy of DCBL.
• According to sources, Dalmia Group, sometime ago separated its cement business into DCBL and had even attracted close to R750 crore investments from one of the major private equity player — KKR — for an undisclosed stake way back in mid 2010 and the funds have been used to grow organically and inorganically.
• Actis is also believed to be one of the investors in the company, the sources added.
• The move has been aimed at expanding the cement business beyond south to north, northeastern states to take logistics and cost advantage apart from creating a market for its brand in these markets.
• Dalmia has 9.5 million tonne capacity now and is holding little over 45% stake in Orissa Cements (OCL), which has around 5.5 million tonne capacity.
• The company is also looking at setting up greenfield plants in Karnataka with a capacity of 2.5 million tonne each.