India: UltraTech Cement opts out from bidding Holcim’s Brazilian assets

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Updated Tue, 13 Jan 2015 11:26:00 GMT

India’s biggest cement maker UltraTech Cement Ltd has decided not to bid for the Brazilian assets of Holcim SA after inspecting some of them. The last date to submit the bid was on Monday. The Aditya Birla group company had submitted non-binding bids for the cement assets in October following which binding bids were due this month. An UltraTech spokeswoman confirmed the development. She did not disclose the reasons for not submitting binding bids. On 9 December, Mint had reported that UltraTech Cement is re-evaluating its decision to bid for the Brazilian assets of Holcim SA, citing two unidentified executives who said the company is rethinking the bid as it has not seen much value in the investment. The assets on sale include three integrated cement plants and two grinding stations with a total capacity of 3.6 million tonnes per annum (mtpa), as well as one ready-mix plant. On 7 July, Holcim Ltd and Lafarge announced a plan for comprehensive divestment in Brazil as part of the planned merger of equals to create LafargeHolcim. Rather than investing in those assets, the company plans to focus and expand its domestic cement production, Mint had reported. India is the second largest market for cement globally after China, while Brazil is the fourth largest. On 23 December, UltraTech Cement had agreed to buy two cement plants and related power assets of Jaiprakash Associates Ltd in Madhya Pradesh for Rs.5,400 crore, giving the country’s biggest cement maker the capacity to cater to lucrative markets in the central Indian state and neighbouring Uttar Pradesh. In India, UltraTech expects to scale up its capacity to 70 mtpa by early 2016 from 62 mtpa, Aditya Birla Group chairman Kumar Mangalam Birla told shareholders at the company’s annual general meeting in August. Shares of UltraTech Cement fell 0.94% to Rs.2701.25 on Monday on BSE, while the exchange’s benchmark Sensex gained 0.46% to 27,585.27 points.