Wednesday, January 3, 2007

JK Cement may buy a 2 mt-plant

JK Cement Limited may acquire a 2 mt-plant in the coming year and may even consider diluting a substantial portion of equity for funding the acquisition. JK Cement has an annual capacity of 4 mt for grey cement and 0.4 mt for white cement. It is amongst the top four cement players in northern region along with ACC, Grasim and Gujarat Ambuja, and also the second largest player in white cement market after Grasim. Being a prominent player in the North, J K Cement’s primary markets are Haryana (18.2% market share), Delhi (13.4%), Rajasthan (11%) and Punjab (4%). Promoters’ holding in the company is currently at 62%, while financial institutions and the public hold the rest. In the next two years, assuming cement prices do not fall, internal accruals and cash in hand could give it about Rs 550 crore.

The Indian cement market is the second-largest in the world with a domestic annual consumption of 135 mt and an installed capacity of 160 mt and the overall cement demand in India is expected to grow at a rate of 9% for the next five years.

Read the complete article in Daily News and Analysis.

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