Consolidation rumours continue in the Indian cement sector with local media reports suggesting that at least three companies have expressed an interest in acquiring the cement business of Binani Industries.
According to Moneycontrol, Dalmia Bharat and Shree Cement are both looking into buying Binani’s 6.25 million tpy cement manufacturing capacity, with an unnamed multinational company also in the frame.
Binani Cement’s Indian operations are located in Rajasthan. The company also has 2 million tpy of installed cement manufacturing capacity in Dubai and 3 million tpy of capacity in China, bringing its consolidated cement making capacity to 11.25 million t.
In addition, it sells to construction markets in the UK, Sudan, South Africa, Tanzania and East Africa, according to the company’s website.
Binani Industries recently announced a net profit for the nine months to December 2016 of INR17.1 million, compared to a pre-tax loss of INR15.6 million the previous year.
The company is however heavily indebted. In November 2016 CARE Ratings revised its rating of the company from B+ to D, indicating a strong risk of default. CARE blamed the revision on the “ongoing delays in debt servicing of the company. The company is facing severe liquidity issues as a result of continuing losses.” Sale of its cement business could help Binani service its debt.
Neither Shree Cement nor Binani Industries responded to requests for comment, while Dalmia Bharat said that it did not respond to speculation.
Rumours of the potential sale of Binani Cement come after ACC and Ambuja Cements denied reports that they were in merger negotiations. Both companies are controlled by LafargeHolcim.
Read the article online at: https://www.worldcement.com/indian-subcontinent/07022017/shree-and-dalmia-in-competition-for-binani-cement/