Birlas may sell cement business to French firm

The KK Birla-promoted Zuari-Chambal group is likely to sell its cement business comprising Zuari Cements Ltd and Shri Vishnu Cements Ltd to Ciments Francais SA of the Italcementi group within this financial year.

The board of directors of Zuari Industries, the group's multi-product company, will meet on May 13 to consider the sale of its 50 per cent interest in Zuari Cements to its joint venture partner in the company, Ciments Francais.

"The company has received an offer from Ciments Francais for the purchase of its 50 per cent shareholding in Zuari Cements. The board is likely to take a decision soon," said sources in the group.

As Shri Vishnu Cements is a fully owned subsidiary of Zuari Cements, this company, too, will become a part of the Ciments Francais stable in India, once the deal goes through. Zuari Cements had acquired Shri Vishnu cements in 2001.

Zuari Industries today informed the Bombay Stock Exchange of the May 13 board meeting.

The sale will mark the Zuari-Chambal group's exit from the cement business. It had invested Rs 129 crore in Zuari Cements, the sources added.

The booming cement industry in the country has attracted global players like Lafarge and Holcim. The Ciments Francais offer is yet another example of a global cement company aspiring for a bigger slice of the Indian cement market.

Zuari Cements has a capacity of 1.8 million tonnes per annum and Shri Vishnu Cements, 1.2 million tonnes. The buyout will, thus, give the French company a capacity of three million tonnes in the country. The combined turnover of the two companies is close to Rs 500 crore.