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G. Naga Sridhar

Hyderabad, Aug. 23 Domestic and international private equity (PE) players are eyeing the cement industry and are actively exploring investment avenues, according to industry experts.

“Keeping in line with the increasing interest in investing in infrastructure development, many cement plants in the country are currently on the radar of international and national PE fund providers,” Mr Ramesh Chandro, Managing Director, Ckoramaandel Cements Ltd, told Business Line.

“Though the details cannot be made public, many cement company management are being approached by global PE players, especially from the US and Europe as per the informal information available within the industry. Some expressed interest in our company as well,” Mr Ramesh claimed.

According to Mr Sreekanth Reddy, General Secretary, All-India Mini Cement Plants Association and Director of Sagar Cements Ltd, the interest among the PE players in investing in cement industry was a fact.

“Most of the PE players are keen to get into funding the existing companies,” he said.

As most of the cement plants are either implementing or planning expansion, PE players find it the right time to chip in with significant investments. “However, we don’t know how many players are actually involved as this would be dealt with in a case by case manner,” he said.

As per the Cement Manufacturers Association data, there are 130 large plant and 356 mini plants in the country.

“The interest of PE players is naturally in the zones where there is huge potential for capacity augmentation and sustainability in the long term. Viewed in this perspective, Gujarat tops in luring PE funding, followed by Andhra Pradesh,” Mr Ramesh pointed out.

A look at the infrastructure investment projections and the cement requirement would bring more sense to the PE interest in investing in cement industry.

“Between 2001 and 2006, $30 billion was invested in infrastructure in India. Estimates by World Bank project a requirement of $475 billion between 2006 and 2011. A substantial part of this would go to the cement industry as the country would need at least 600 million tonnes of cement by 2015,” he explained.

More Stories on : Venture Capital | Cement

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