INDIA BUSINESS WORLD - AUGUST 2006
THE MONTH THAT WAS...

HEIDELBERGCEMENT TO TAKE CONTROL OF JV WITH INDORAMA

GERMAN giant HeidelbergCement, the world's fourth-largest cement maker, plans to take control of its equal joint venture with Indorama Cement to consolidate its position in the Indian market. A formal announcement is expected in the next few weeks.

HeidelbergCement entered India through a JV with Indorama, an unlisted company owned by the Indonesian Indorama SP Lohia group, in March 2006. The JV owns a 7.5-lakh tonne cement unit in Maharashtra 's Raigad district. HeidelbergCement is also looking at increasing the capacity of the grinding unit by two to three folds.

HeidelbergCement managing board member Daniel Gauthier said, “We already have management control of the JV, but would like to acquire a controlling stake in the company now. The board is also deliberating capacity expansion at the plant but it is yet to be decided.”

After announcing its intention to acquire majority stake in S K Birla-promoted Mysore Cements (MCL) in July, HeidelbergCement is now planning to double capacity at its facility in Ammassandra, in south India , to over 1 million tonnes from the current 600,000 tonnes. It is also looking for new quarries in the north, where it can find long-term deposits that will it help reduce cost of limestone.

The German firm is now scouting for acquisitions and has set itself a target of 5 million tonnes in the next three years, which would rise to 10 million tonnes in five years.

HeidelbergCement currently has a total capacity of 3.1 million tonnes in India . Industry watchers say Heidelberg has been looking to buy big plants in the north for some time now.