Mumbai: There are no plans on the anvil to merge Indian cement firms ACC Ltd and Gujarat Ambuja Cements Ltd, both partly owned by Swiss-based Holcim, the chairman of ACC said on Wednesday.
Holcim, the world’s second-largest cement producer, holds nearly 28% of Gujarat Ambuja and controls about 38% of ACC.
There has been market speculation that ACC and Gujarat Ambuja will be merged at some point to better compete in India’s consolidating cement sector. India has more than four dozen big cement makers running about 365 plants with a capacity to make 165 million tonnes a year.
Asked about the speculation, ACC Chairman N.S. Sekhsaria told reporters on the sidelines of a shareholders meeting: “No plans for the time being.”
Sekhsaria also said ACC was looking to sell its steel casting unit, ACC-Nihon Castings Ltd, as part of its plans to exit non-cement businesses.
“We will divest if we find a suitable buyer,” he said.
A decision by cement makers to hold prices for one year to help the government fight inflation is unlikely to squeeze earnings, Sekhsaria said.
“No significant impact is seen on the company’s performance,” he said.
ACC, India’s second-largest cement maker behind Aditya Birla Group firms, which is raising its output capacity is also looking at takeovers to boost growth.
“We are continuously looking at acquisitions,” Sekhsaria said, but did not elaborate.
ACC aims to raise cement making capacity to 23.1 million tonnes a year by the end of 2007, and to 27.5 million by end-2009. It had a capacity of 19.91 million tonnes at the end of 2006.
Shares in ACC were down 0.35% at Rs731.50 by 1:15 pm local time in a weak Mumbai market that was 1.5% lower. Gujarat Ambuja dropped 1.7% to Rs102.65.