Cementi Plans Big Expansion

Italcementi of France is drawing up a $300 million plan for acquiring Indian cement plants and start greenfield projects in the country through its recently-formed joint venture with K K Birla-promoted Zuari Industries Ltd.

Italcementi plans to form joint ventures with other Indian cement companies as well.

"The company has a scope to increase its production capacity to 6-7 million tonne from 1.7 million tonne through the present joint venture. To achieve it, we may acquire some cement projects of 1-2 million tonne capacity, besides setting up at least two greenfield projects," according to Michel Lefebvre, member of the executive committee of the Italcementi group.

 

Accepting that the company is having talks with various Indian companies for joint ventures, Lefebvre said it would not affect its venture with Zuari Industries.

He did not deny the possibility of forming JVs or buying plants of companies promoted by B K Birla, C K Birla and S K Birla. However, he declined to divulge the names of prospective partners.

The expansion plans of the company will be implemented in the next two to three years. And Lazart India will advise on the entire expansion plan.

Emphasising the company's expansion plan, Italcementi Group company Cementis Francais senior vice president-Strategy & International Development Marc Desgranges said, "Our policy is quite clear so far joint ventures are concerned. We will not go below 50 per cent of stake in a joint venture company." "However, our intention is to take benefit of the strenghts of our local partners. We believe in equality and in sharing experience to maximise value," he added.

Citing the example of its first JV in India with Zuari Industries, he said that in the 50 per cent joint venture, the company will have an equal number of board members from the two sides.