UltraTech Cement, an Aditya Birla group company, has acquired the cement grinding assets of Burnpur Cement Ltd in Jharkhand for ₹169.79 crore. This acquisition, done under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) Act provisions, marks UltraTech’s entry into Jharkhand, adding 0.54 million tonnes per annum (MTPA) capacity to its existing 133 MTPA capacity in India.
A Strategic Move to Expand Presence in Eastern India
This acquisition is a strategic move by UltraTech Cement to expand its presence in the eastern India market, which is one of the fastest-growing cement markets in the country. Jharkhand, in particular, is a high-growth market driven by infrastructure development and urbanization. The acquired grinding unit is strategically located in the state and has access to abundant limestone reserves.
Strengthening UltraTech Cement’s Market Position
The acquisition will also strengthen UltraTech Cement’s market position in the eastern India region. The company will now have a strong presence in all the major cement-consuming states in the region, including West Bengal, Odisha, and Bihar. This will give UltraTech Cement better access to the growing demand for cement in the region.
A Boost for UltraTech Cement’s Financial Performance
The acquisition is expected to be accretive to UltraTech Cement’s earnings per share (EPS) in the first year of operation. The company expects to achieve synergies from the acquisition by optimizing logistics and reducing production costs.
Key Highlights of the Acquisition
- The acquisition of Burnpur Cement’s grinding assets marks UltraTech Cement’s entry into the Jharkhand market.
- The acquired grinding unit has a capacity of 0.54 MTPA.
- The acquisition is expected to be accretive to UltraTech Cement’s EPS in the first year of operation.
- The acquisition will strengthen UltraTech Cement’s market position in the eastern India region.
Industry Implications
The acquisition of Burnpur Cement’s grinding assets by UltraTech Cement is a significant development in the Indian cement industry. It is likely to lead to further consolidation in the industry, as larger players look to expand their market presence. The acquisition is also likely to put pressure on smaller cement players in the eastern India region.
Overall, the acquisition is a positive development for UltraTech Cement. It will strengthen the company’s market position, expand its presence in a high-growth market, and boost its financial performance.
