Holcim may up ACC pie to 51%

ACC to invest Rs 600 crore on modernisation and expansion this year.

Swiss cement major Holcim may increase its holding in The Associated Cement Companies Ltd (ACC) to over 51 per cent.

Currently, Holcim and Gujarat Ambuja Cements Ltd, through a holding company Ambuja Cements India Ltd (ACIL), owns 34.6 per cent. Holcim owns 67 per cent stake in ACIL against Gujarat Ambuja's 33 per cent.

"As of now, we are happy with our current holding in ACC. However, in future if the timing is right, we may think of increasing our holding in the company," said Holcim CEO Markus Akermann, who is a director on the ACC board.

In April this year, Holcim's open offer for 51 per cent stake in ACC fell short of the target. The open offer made through ACIL could get only an additional 20.8 per cent stake in ACC, taking its total stake to 34.6 per cent.

Akermann attended the 69th annual general meeting of ACC "" his first after Holcim's acquisition of the company. Paul Hugentobler is the other director from Holcim on the ACC board.

Ackermann was bullish on the prospect of doing business in India. Being a major stake holder in ACC, Holcim's primary responsibility would be to improve ACC's performance through cost restructuring and debottlenecking measures, Ackermann said.

There will be talent exchange programmes at the management levels in Holcim and ACC. Innovative technologies in manufacturing and information technology would be employed in ACC, which would result in higher energy efficiency and product development, he said.

ACC will invest Rs 600 crore in the current year. The amount will be utilised mostly in the modernisation and expansion of the company's plants in Chaibasa, Gagal and Lakheri.

After the completion of the above projects by 2007, ACC's total capacity will reach 20.60 million tonne against the current capacity of 18.30 million tonne.

"ACC will focus on growing at a rate better than the industry. We would concentrate on growing through brownfield expansion. We may also go for acquisition if the opportunity is right," said M L Narula, managing director, ACC Ltd.

Q1 net up 72% to Rs 139 cr

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Associated Cement Companies (ACC) has posted a 72 per cent increase in its net profit at Rs 139.36 crore for the quarter ended June 30, 2005 compared with Rs 81.23 crore in the corresponding period of the previous year.

Net sales posted a 16 per cent growth at Rs 1290.58 crore for the first quarter against Rs 1100.96 crore in the corresponding quarter of previous year.

The company stated that the sale of cement for the first quarter has increased by 13 per cent to 4.41 million tonnes compared with 3.89 million tonnes for the corresponding period last year.

The company incurred a higher depreciation for the first quarter at Rs 47.98 crore compared with Rs 43.91 crore in the corresponding period of last year.

The company informed these were on account of the acquisition of Wadi CPP and commissioning of Chaibasa CPP and Gagal Unit I expansion.

Alongside, the company has decided to change its April-March financial year to January-December.

The decision to change the financial year is aimed at alinging its financial year with that of its promoters, Holcim. The current financial year will be for a period of nine months to close in December 31, 2005.