ACC to divest 3 non-core arms

AMCL, ACC Nihon Casting, Almatis to be put on block

The Associated Cement Companies (ACC), close on the heels of offloading its refractory business, is planning to divest three of its non-core subsidiaries.

An ACC executive said the company would divest these non-core subsidiaries at a right price. "In principle, we have decided to pull out of non-core businesses. We are, however, in no hurry," he added.

Although he did not mention the name companies, merchant banking sources said the subsidiaries were machinery company AMCL, casting company ACC Nihon Casting, and Almatis ACC, a joint venture between ACC and Almatis.

It is a global leader in the development and manufacture of high quality specialty alumina products.

The world's second largest cement maker Holcim after announcing its plan to acquire ACC through a complex deal in January had made it clear that it would see ACC coming out of its non-core businesses.

Holcim had also announced that ACC would sell its controlling stake in Everest Industries, a construction company.

The Ahmedabad-based Adani group had shown interest to acquire Everest Industries which, however, hit regulatory hurdles.

Along with divestment of its non-core activities, ACC is also in the process of merging its subsidiaries in the core-businesses and expanding its production facilities.

Recently, the board had approved a plan to merge two subsidiaries, Bargarh Cement and Damodhar Cement and Slag with the itself. It has also announced a Rs 600 crore expansion plan.

In its message to the shareholders, ACC chairman Tarun Das had said that this merger would serve to usher in better operating efficiencies, productivity and economies of scale that would help reinforce the company's presence in Eastern India.

After this merger and the completion of ongoing projects at Chaibasa, Gagal and Lakheri, the total installed capacity of ACC will go up to 20.6 million tonne per annum. The merger is to be effected from April 1, 2005.

In 2004-05, the company had disinvested the loss-making Mancherial Cement Works in Andhra Pradesh, which was established nearly fifty years ago.

The unit has an installed capacity of just 3.31 lakh tonne per annum. Yesterday, the company has announced to sell its refractory business to ICICI Venture for Rs 257 crore. The sell-off decision has gone well in the stock market.

The ACC stock today reached a 52-week high of Rs 424.50 against yesterday's closing of Rs 422.65.