Dalmia Cement picks up 50% in Assams Calcom for R238 crore

Written by R Ravichandran | Chennai | Updated: Jan 17 2012, 07:51am hrs
Dalmia Bharat Enterprises said on Monday that Dalmia Cement Bharat (DCBL), its subsidiary, has picked up 50% stake in Assam-based Calcom Cement India for an investment of R238 crore. Calcom Cement plant is a privately-held company and Assam Industrial Development Corporation (AIDC) is believed to be holding a little over 10% stake in the company. Apart from this, Calcom also has some foreign investors.

At present, Calcom Cement India is expanding its consolidated cement manufacturing capacity to 2.1 million tonnes per annum. DCBL said that the investments would be made through a combination of new issuances and acquisitions and subject to the various terms and conditions set out in the definitive documentation.

Amit Chaudhery, group corporate communications, Dalmia Bharat Group, said, DCBL has arrived at an in-principle agreement with Assam-based Calcom Cement for a 50% stake in that company. Calcom Cement has a robust presence in markets of the northeast. The 50% ownership of this 2.1 million tonne semi-commissioned plant will come at an investment of R238 crore and is a first concrete example of the non-organic, acquisition-based growth strategy of DCBL.

According to sources, Dalmia Group, sometime ago separated its cement business into DCBL and had even attracted close to R750 crore investments from one of the major private equity player KKR for an undisclosed stake way back in mid 2010 and the funds have been used to grow organically and inorganically. Actis is also believed to be one of the investors in the company, the sources added.

The move has been aimed at expanding the cement business beyond south to north, northeastern states to take logistics and cost advantage apart from creating a market for its brand in these markets. Dalmia has 9.5 million tonne capacity now and is holding little over 45% stake in Orissa Cements (OCL), which has around 5.5 million tonne capacity. The company is also looking at setting up greenfield plants in Karnataka with a capacity of 2.5 million tonne each.