Lafarge plans to exit India operations

Lafarge plans to exit India operations

Lafarge India has submitted a revised proposal to the Competition Commission of India (CCI) to sell its entire 11-million tonne (mt) asset in India. This decision comes after the company´s plan to sell its 5.15-mt cement capacity in Chhattisgarh and Jharkhand to Birla Corp. for Rs 5,000 crore ran into trouble. Investment bankers said the M P Birla Group was facing challenges in securing limestone mining rights.

Lafarge and Swiss cement giant Holcim after global merger in April 2014 to create the world´s largest cement company. This raised eyebrows of anti-trust watchdogs in several countries.

In India, Holcim, through its control of Ambuja Cement and ACC, has 60 mt of capacity. Lafarge, on the other hand, has a capacity of 11 mt in India, of which 7.8 mt (70 per cent) is in Chhattisgarh, Jharkhand and West Bengal. Holcim´s ACC and Ambuja have capacities of 6.1 mt and 4.6 mt, respectively, in India´s eastern region. A simple merger would have led to a capacity of 18.5 mt in the eastern states for Holcim-Lafarge, which would have been more than 40 per cent of the estimated 46 mt of total capacity in the region. This led to a scrutiny by the CCI.

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