Germany's Heidelberg enters India

Forms 50:50 joint venture with Indorama Cement.

HeidelbergCement, a $8.36-billion German major, has entered India by setting up a 50:50 joint venture with the SP Lohia-owned Indorama Cement.

The new venture will run the grinding plant of Indorama at Raigad in Maharashtra.

The joint venture has proposed to build a clinker plant in Gujarat. Indorama's Raigad plant, about 100 km from the city, produces high-quality slag cement with a capacity of 7,50,000 tonnes per annum. The company also operates a terminal near the Mumbai harbour.

"The cement grinding plant in Mumbai is our entrance gate to India," said Bernd Scheifele, chairman of the managing board of HeidelbergCement.

"Step by step, we intend to expand our activities in this very promising market. The joint venture in India is in step with our strategy to invest in the growth market," he added.

The German company will be the fourth global cement giant to enter Indian after Lafarge, Italcementi and Holcim. HeidelbergCement last year recorded sales of 65 million tonnes.

It is among the leading producers of concrete and building materials, including dry mortar, lime and sandlime.

The company has presence in six Asian countries, including China, Hong Kong, Bangladesh and Indonesia. In Bangladesh, the company has an import terminal and has participation in a grinding plant at the Chittagong port. Its two production sites in the country have a combined capacity of 1.5 million tonnes.

French player Lafarge was the first one to enter India in 1999 through the acquisition of Tata Steel's cement plants. Two years later, it acquired Raymond's cement business.

Last year, Swiss major Holcim entered the country. It has substantial stake in Gujarat Ambuja Cements and the Associated Cement Companies.

Italian major Italcementi started its Indian operations through a 50-50 joint venture with the Zuari group. India is the world's second largest cement market, with demands going up by about 7.5 per cent per year over the last decade.

Jakarta-based Indorama SPL owns Indorama Cement. Its owner, SP Lohia, is the brother of OP Lohia who manages the Delhi-based Indo Rama Synthetics.