Mumbai: Ambuja Cements Ltd (ACL), India’s second largest cement maker, will get a new chief executive officer (CEO) from 1 May 2010.
Four years after Holcim Ltd, the second largest global cement company after French cement maker Lafarge SA, acquired management control of ACL from Satyanarayan Seksaria, Holcim executive Onne Van Der Weijde will take over as CEO of the company.
Weijde, who has been a board member of both ACL and ACC Ltd, will replace the current managing director of ACL, Amrit L. Kapur, who had worked with the founder chairman Seksaria, now vice-chairman of ACL. Kapur retires on 30 April 2010.
“Weijde will work with Kapur for six months from November 2009 to April 2010,” said ACL spokesman Nandkumar Sanglikar.
Between 2005 and 2006, Holcim bought the controlling stakes in both the companies.
Weijde, who has been a board member of both ACL and ACC Ltd, will replace the current managing director of ACL, Amrit L. Kapur. Sandeep Bhatnagar / Mint
Between ACC and ACL, Holcim now produces about 40 million tonnes (mt) of cement every year, almost matching the cement production of Ultra Tech Cement Ltd and Grasim Industries Ltd of Aditya Birla Group. Weijde will be appointed as the CEO designate in November, ACL’s Sanglikar said.
A postgraduate in business administration from Bradford University, UK, Weijde joined Holcim in 1996. In March 2005, he was appointed director and general manager for Holcim (India) Pvt. Ltd, that owns majority stakes in both ACL and ACC.
In May 2006, he was appointed chief financial officer of ACC, and subsequently in January 2007 he joined the company’s board as a non-executive director.
Paul Hugentobler and Markus Akerman, both from Holcim, sit on both the ACL and ACC boards.
The ACL board is chaired by Suresh Neotia and has Narottam Seksaria as his deputy while ACC is chaired by Seksaria himself even after both of them sold their controlling stakes to the Swiss cement firm in 2006.
The appointment of the new executive comes at a time when multinational companies such as Lafarge and Holcim are keen on expanding their market shares from two of the largest cement markets in the world — China and India.
Holcim earned 23% share of its revenues from the Asia Pacific region in 2008 and Lafarge wants to double the contribution from India to its global turnover to 8% in few years and banking on Indian government’s focus on infrastructure and housing.
But analysts are cautious about ACL’s earnings growth. In a 24 July CLSA Asia-Pacific Market report, titled India Materials, Somasekhar Sinha and Vivek Maheshwari said Ambuja’s earning growth would lag industry over the next couple of quarters on account of higher costs. The authors also expect pricing pressure to escalate by end-2009 as the demand-supply scenario worsens.
Seksaria, a chemical engineer from Mumbai University, had set up ACL in 1985 but sold his controlling stake along with his partners, the Neotia family, to Holcim in 2005.
After the cement business was decontrolled in 1989, Seksaria ramped up capacity through acquisitions, a route Holcim copied to build cement capacity in India unlike its rival Lafarge that slowed down its expansion after acquiring two cement plants between 2002 and 2005 fromTata Steel Ltd and Raymond Ltd.