India Cements to merge with subsidiary Trinetra Cements

Company plans to sell surplus lands as part of business restructuring

India Cements Limited on Tuesday announced a plan to merge with its subsidiary, Trinetra Cements Ltd,  beside selling large portions of land near its plants in Tamil Nadu and Andhra Pradesh and looking at real estate development, through its real estate arm.

N Srinivasan, vice-chairman and managing director, India Cements, said the company wanted to consolidate cement operations and the merger of Trinetra Cements and Trishul Concrete Products with India Cements would bring operations under one company.

“We will get the benefit of profitability of Trinetra and improve the performance of India Cements,” Srinivasan said, adding that following the merger, the total annual capacity of India Cements would go up to 15.8 million tonnes.

From a two-plant company with yearly capacity of only 1.3 million tonnes in 1989, India Cements’ total capacity increased to 15.5 million tonnes per annum in the past two decades. It has seven integrated cement plants in Tamil Nadu and Andhra Pradesh, one in Rajasthan (through  Trinetra Cements) and two grinding units, one each in Tamil Nadu and Maharashtra.

In recent days, analysts’ reports quoting the management had stated that the company planned to sell excess land with an estimated value of Rs 1,000 crore over the next 12 months. It would consider the option to de-merge non-cement businesses after the completion of the merger of Trinetra Cements, the reports had added.

On Tuesday, Srinivasan said the company was looking at selling non-core assets, especially surplus land near the company's facilities in Tamil Nadu and Andhra Pradesh.

“We have identified lands but the valuation is poor and buyers are not available,” said Srinivasan, adding that the company was also looking at developing real estate projects, through its real estate division.

India Cements’ real estate division is already implementing a Rs 90 crore residential project in Coimbatore. The land was owned by India Cements.

Over the years, India Cements has ventured into related fields like shipping, captive power and coal mining that provide a purposeful synergy to the core business. This also stemmed from the company’s strategy of emerging as an integrated pan-India player to combat uncertainties in securing energy and other inputs in the supply chain at competitive costs.

Commenting on his Indian Premier League team, Chennai Superkings, Srinivasan said revenue increased to Rs 166 crore in 2013-14 from Rs 136 crore in 2012-13. “We are yet to leverage full commercial benefit from the team,” he said, adding that the investors had not given value to the team.