Holcim eyes GACL majority stake

Swiss cement major Holcim, which had raised its stake in Gujarat Ambuja Cement Limited (GACL) to 18.4 per cent from 14.8 per cent last month, said going in for a majority holding in the Indian company was not an impossible proposition over a period of time owing to the current strong market sentiment.

Speaking to the media on the sidelines of Global Logistics Summit, organised by the Indian School of Business (ISB) here on Wednesday, Thomas Schmidheiny, director of Holcim, who holds 22 per cent equity in the Swiss multinational, said the company would continue to increase its stake in GACL. Taking over its management control, according to him, is not impossible over a period.

Meanwhile, Holcim would continue to look for joint ventures in the Indian cement sector as it is keen on organic growth as well. "We want to follow the market by adding 2 million tonne capacity a year," Schmidheiny said.

Though, he was evasive about his company's next big plans in terms of acquisitions, he, however, revealed Holcim's intention to enter other businesses in India.

He said there were a couple of other things on the company's immediate agenda, like modernising certain elements in the existing manufacturing facilities.

Earlier, delivering the keynote address on 'how to build a global business' at the summit, Holcim's director spelt out the role of emerging markets in the company's road map to emerge as the largest player in the global cement industry up from its second largest status next to Lafarge.

He said while Lafarge had 60 per cent of its business operations concentrated in the developed world, the remaining 40 per cent accounts for by the emerging markets.

In the case of Holcim, it is quite opposite with its 60 per cent operations being located in emerging markets. According to him, Holcim's particular positioning in terms of spread holds promise to over take Lafarge in the near future as the new business opportunities being offered by emerging markets in the cement sector is unmatched.

According to an estimate, with a compounded annual growth rate of 12.5 per cent for the next five years, the country is expected to require about 270 million tonnes, including exports, by 2010-11 as compared with the 150 million tonne consumption during 2005-06.

This requires about 24 million tonnes of new capacity a year.