Dalmia Cements looking at M&As

Kadapa : Dalmia Cement (Bharat) Ltd (DCBL), second largest producer from the southern region, is evaluating options to buy out cement companies.DCBL had charted plans to launch a 10-million tonne per annum (mtpa) capacity in 2008 through its wholly owned subsidiary, Dalmia Cement Ventures Ltd (DCVL), which never took off. It was looking at setting up plants in Himachal Pradesh, Meghalaya, Rajasthan and Madhya Pradesh, with investment of about Rs 4,200 crore.

It did not set proceed with these and is looking at a spread of new projects and mergers & acquisitions (M&As) from the money it received through private equity infusion.

DCBL received Rs 500 crore from PE giant Kohlberg Kravis & Roberts (KKR) in May 2010 for a stake sale of 20 per cent in its cement subsidiary, Avnija Properties. KKR has an option to top it by another Rs 250 crore. It had assessed DCBL for an enterprise value (EV) per tonne of $104.

DCBL was also looking at coal mine assets in Indonesia and South Africa. These didn’t take off. Dalmia said, “We continue to explore for coal mine assets in Indonesia and South Africa. Indonesia is taking a while because of the political unrest in the country and the sites that we saw had long gestation period. We are looking for the right asset and also the risk profile. We will look very carefully at something that we like; otherwise, we are importing from the best suppliers in the world.”