Binani Cement buys stake in China plant

Binani Cement buys stake in China plant
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First Published: Wed, Aug 01 2007. 12 27 AM IST
Updated: Wed, Aug 01 2007. 12 27 AM IST
Binani Cement Ltd, a mid-sized cement manufacturer that has a presence in northern Indian markets, has picked a 49% stake in a clinker manufacturing plant in Shandong province in China for $11 million (Rs44.4 crore). The company now plans to sell cement in China, West Asia and in eastern Africa.
The plant, owned by Shandong Rongan Group, produces 0.4 million tonne (mt) of clinker, a raw material used to make cement. The Shandong Rongan Group is a northwest China-based diversified business group that engages in mining and power businesses.
“We will provide the technology to produce cement, and also increase the plant’s capacity to 2.2mt over next two years,” said Vinod Juneja, joint managing director of Binani Cement Ltd. “We are looking at investing around $100 million.” The company will fund the $11 million it spent through internal accruals. “The investment of $100 million will be through a combination of debt and internal accruals. We are talking to Chinese- and Hong Kong-based banks to raise the debt portion,” Juneja said. Binani Cement stock closed at Rs67.90 on the Bombay Stock Exchange on Tuesday—up by 0.07%, while Sensex, the benchmark index, gained 1.9%. This is the first time an Indian cement manufacturer is looking to enter the China cement market. China, the world’s largest cement market, is growing at over 12%. Binani Industries Ltd, which has business interest in zinc and glass fibre besides cement, is present in Dubai through a joint venture with Albwardy Investment. It produces around 1mt of cement at Jebel Ali in Dubai.
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First Published: Wed, Aug 01 2007. 12 27 AM IST