UltraTech won't be merged with Grasim: Kumar Birla
The Aditya Birla group has no plans of merging UltraTech Cement with parent Grasim Industries, chairman Kumar Mangalam Birla said on Monday, putting to rest recent speculation that the group is working on a blueprint to bring together similar indu...
By TNN |
MUMBAI: The Aditya Birla group has no plans of merging UltraTech Cement with parent Grasim Industries, chairman Kumar Mangalam Birla said on Monday, putting to rest recent speculation that the group is working on a blueprint to bring together similar industries under a single umbrella.
“There are no plans at the moment,” Mr Birla told reporters when asked about a possible merger, after an annual general meeting of UltraTech on Monday. Group flagship Grasim Industries owns 51% in UltraTech which it bought from Larsen & Toubro in ’04 for about Rs 2,200 crore.
Grasim Industries is India’s largest cement maker with a capacity to make about 33 million tonnes a year, a shade larger than its nearest rival, the Holcim-Gujarat Ambuja-ACC combine, which makes about 31 million tonnes.
The Indian cement sector has been all agog with the talk of a possible merger of all cement units in the Birla fold since the UltraTech acquisition.
Industry experts said the move would be targeted at cost and tax savings, apart from gains from economies of scale. Narmada Cement, Digvijay Cement, Rajashree Cement, Century Mills and Kesoram Industries are some of the units in this fold.
ADVERTISEMENT
Mr Birla also outlined an ambitious expansion programme for UltraTech on Monday. The company’s capex plans include an expenditure of around Rs 1,424 crore to be spent over the next three years. Of this, Rs 844 crore is for captive power plants in Gujarat and Chhatisgarh.The company also wants to tap the growing cement market in southern India and is scheduled to invest Rs 1,274 crore for a 4-million tonne plant in Andhra Pradesh. This also includes 1.3 million-tonne split grinding unit and a 46-MW power plant.
“The government’s initiatives on infrastructure development and the boom in the housing sector are major growth drivers for the cement industry,” said Mr Birla. The Indian cement sector is the world’s second-largest after China.
“In the medium term, the demand and supply situation is expected to be in a state of balance, before the next cycle of new capacity enters the market,” he added.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
