Cash-rich ACC lines up shopping list for buys

Speaking to FE, Onne van der Weijde, CFO of ACC said, ?ACC has enough funds and we want to expand. Considering the geographic separation in the businesses of ACC and Ambuja Cements in India, we know where an acquisition would fit in. We know the company and we know the location. ACC Ltd has shortlisted some companies for acquisition,? he revealed.

Without disclosing specifics, Sumit Banerjee, MD of the company said, ?This is a part of our business strategy. If we look at investments, we look at greenfield investments, brownfield investments and also which company will fit in geographically.?

The company is also weighing the option of whether an acquisition makes more sense to get into at present, or whether, given the changing dynamics of the cement sector, the company would be better off waiting for some time before clinching a deal. ?It may, in some cases, be better from the value point of view to wait a bit longer,? van der Weijde said.

Cement industry sources say there may be cases, given the present conditions of high input costs and the pressure on pricing, of some plants which are being put up even being unable to be completed.

With the current capacity of 22.4 million tonne, ACC is now concentrating on what it calls a ?build and buy theory?, one that selectively combines the twin strategies of acquisition with one of expansion and setting up capacities organically.

On another front, while Holcim was in the race for acquiring L&T?s ready-mix concrete (RMC) business, the company was not eventually able to clinch it. Company officials said the deal appeared to be slightly expensive for the company. ?The L&T acquisition would have given a boost to the company, but we can still do without it,? Banerjee said.

Although ACC is a long standing player in the cement industry, input cost escalations have muted financial performance in recent times, say experts.