The Hindu Business Line : Post-L&T Concrete buy, Lafarge grabs 25% market share

Mumbai May 15 Lafarge’s late Wednesday acquisition of L&T Concrete for an enterprise value of $349 million (Rs 1,480 crore) has catapulted the French cement maker into a leading player in India’s nascent Ready-Mix Concrete (RMC) market, with a market share of 25 per cent.

For Lafarge, the acquisition is only the first step towards further consolidating its presence in the domestic RMC market, which is growing at 25 per cent annually. The buy-out follows the recent start-up of operations at Lafarge’s first greenfield RMC plant in Raipur.

“We intend to ramp up our capacities in line with the growth in the Indian RMC market. We will be looking for more greenfield projects rather than minor acquisitions. We intend to set up 10 RMC units every year to match the growth in the domestic RMC market,” Mr Bradley Mulroney, Regional President Asia and Middle East of Lafarge Aggregates & Concrete, told Business Line on the sidelines of the media conference to announce the deal on Thursday.

Lafarge’s investment in the Indian RMC space is part of the French company’s overall plans to invest €500 million in the emerging markets in the world every year. “And India is an important piece of this investment plan,” Mr Mulroney said.

FUNDING

Lafarge will be funding the acquisition through a debt-equity ratio of 50:50. “We intend to raise the debt part in India,” Mr Mike Glover, Managing Director of Lafarge Aggregates & Concrete India, said.

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