Lafarge eyes buyouts to increase capacity

Cement major Lafarge India will explore acquisitions to enhance its manufacturing capacity in view of the growing demand for cement.

At present Lafarge's cement manufacturing capacity stands at five million tonne, with another three million tonne of clinker manufacturing capacity. The company has witnessed capacity utilisation of more than 80 per cent in the last few months.

"Our cement manufacturing capacity stands at 5 million tonne while we sell around 4.2 million tonne. The cement industry is expected to grow at six per cent this year and a little more than that in the next year. We would require increased installed capacity to cater to the demand. We would then look for acquisitions to bridge the gap between supply and demand," explained Shivesh K Sinha, chief financial officer, Lafarge India.

"We have the funds and the technology but we will acquire companies or units where we can add value," Sinha added.

Sinha was speaking at the sidelines of a lecture organised by the ladies group Millennium Mam's on the cement industry, in which H M Bangur of Shree Cements also participated.

Lafarge has captured the bulk of the markets in eastern India, north and central India, while its products are not readily available in the west and the south.

Sources said Lafarge's next acquisition destination could be in southern India where it is yet to make its presence felt.

Lafarge commenced operations in India by acquiring Tata Steel's cement plants in 1999. In January 2001, it acquired the cement business of Raymond Ltd.

Lafarge India's current cement operation comprises a modern split location cement facility at Sonadih in Chhattisgarh and at Jojobera in Jharkhand, along with an integrated cement facility at Arasmeta in Chhattisgarh.