BackBirla Corporation defends deal to buy Reliance Infra’s cement business
Birla Corporation chairman Harsh Lodha says cement production after the completion of the deal will be 15.5 million tonnes per annum
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Kolkata: M.P. Birla group flagship Birla Corp. on Friday defended the ₹ 4,800 crore deal to buy Reliance Infrastructure Ltd’s cement business, saying the sector’s outlook is good with demand pull seen in the near future.
Replying to shareholders’ concerns at the company’s annual general meeting on Friday, Birla Corp. chairman Harsh Lodha said Reliance Infrastructure’s cement business was a good fit for the company.
This was the reason why Birla Corp. decided to acquire the assets of Reliance Infrastructure, Lodha said, adding the acquisition process is on. The acquisition is subject to all the statutory approvals, he said.
He said Birla Corp. was an efficient producer of cement, and there was still scope for improvement and Reliance Infrastructure would add to that. Birla Corp. is predominantly a cement manufacturing company with presence in the north, east and the central regions, Lodha said.
“The acquisition will help step up the presence of Birla Corporation and the total capacity post the completion of the deal will be 15.5 mtpa (million tonnes per annum)," he said, adding the long-term future of the cement industry is good and there would also be a demand pull in the near future.
Regarding the jute business, Lodha said efforts were being made to de-risk it from mandatory packaging orders. The firm would also close down one of its subsidiaries, Birla Cement Assam Ltd.
(Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.)
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