Emami on the prowl for cement assets

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The Emami group, which established itself as a force in the FMCG sector through a series of acquisitions of companies like Zandu or brands like Kesh Kala, is again on the prowl, this time to speed up its nascent presence in the cement sector.

“We have a knack for acquisitions which we have shown in our main personal care business. We plan to follow a similar strategy for our cement business,” Aditya Agarwal, director of the Rs 10,000 crore Emami said.
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Acquisitions would be a key part of Emami’s strategy to be a major player in the cement industry where several entities are jostling for a space in an overcrowded market dominated by multinational Holcim. Consolidation is being seen in the industry, with Reliance being the latest to exit the business.

Emami has just started off with a 5.5 million tonne integrated cement plant at Balodabazar district of Chhattisgarh at an investment of Rs 3,500 crore, which will feed its grinding units coming up at Panagarh in West Bengal and another one at Odisha. Since July, the company has been reaching out to the states in the eastern region as well as the eastern region of Maharastra, known as Vidharbha.

The plan is to grow much more.

“We have set a target to achieve 15-20 million tonne in the next five years,” he said.

Of this, another 5.5 million tonne would come up at Rajasthan and adjoining states to cater to the northern region. The Rajasthan plant would be catered to by the Nagapur limestone mine, which the group had bagged in September through the first ever non-coal mining lease allocation by the state. In Andhra Pradesh, the group has plans to set up another 3 million tonne.

“Cement capacities are restricted by limestone mines. We have mines in Chhattisgarh, in Andhra Pradesh while we have bagged recently one in Rasjasthan,” Agarwal said.

A part of the rest of the cement capacities can come from the acquisition route, the Emami promoter representative said.

With Rs 3,500 crore being invested in the east in Chhattisgarh, Bengal and Odisha, a similar investment would happen in the northern region also.

“We would need about three years to develop the Rajasthan mine (Nagapur) by which our plant there would come up,” he said.

Emami Cement, which began operations at its integrated cement manufacturing plant in Chhattisgarh in July this year, is expecting to clock revenues of around Rs 500 crore for a full year of operations ending March 2017, Agarwal said.