Ultratech scouting for overseas acquistion

Aditya Birla Group company, Ultratech Cement, is scouting for overseas acquisitions to expand its cement manufacturing capacity by 50 per cent to 75 MT.

Kumar Mangalam Birla, chairman of Ultratech Cement, said, the company was planning to make investments in the Indian Ocean region (IOR) to enhance its cement manufacturing capacity. He added the company was looking for value addition opportunities and  exploring both organic and inorganic growth to further strengthen the leadership position it enjoyed.

He however, categorically denied news reports that the company was looking to acquire Latin American assets of Cemex and Votorantim Group. He said the reports were factually incorrect, while speaking to  TOI on the sidelines of Ultratech's 11th AGM in Mumbai yesterday.

Analysts say the Indian cement sector, reeling under pressure at home due to over capacity, was seeking to augment capacities overseas in key growth markets. The sector with a manufacturing capacity of 100 MMTA is the process of doubling capacity over the next five years.

Ultratech has lined up capex of $2.4 billion to enhance its capacity by another 9.2 MT by 2014, which would be funded through a mix of internal accruals and borrowings as its debt-equity ratio stood at 0.39 with ample scope for raising debt.

Justifying the company's Gulf acquisition while addressing a shareholders query, Birla said, the market for cement in Emirates and GCC would look up in the next two years.

''By acquiring ETA Star Cements, we got a market share of 10 per cent in an established brand name."