Binani Cement becomes wholly-owned subsidiary of UltraTech Cement

Workers walk in front of an UltraTech concrete mixture truck at the construction site of a commercial complex on the outskirts of the western Indian city of Ahmedabad April 22, 2013. UltraTech Cement Ltd, India's biggest cement producer, reported a 16.3 percent year-on-year fall in profit for the quarter ended March 31. REUTERS/Amit Dave (INDIA - Tags: BUSINESS CONSTRUCTION EMPLOYMENT)

The UltraTech Cement board at its meeting held on Monday, has approved UltraTech’s proposal to form Binani Cement Limited (BCL) into a wholly-owned subsidiary of UltraTech from Tuesday, further consolidating UltraTech’s position as one of the largest cement player globally even as the company continues to be the biggest player in India.

A resolution plan for Binani Cement submitted by UltraTech was approved earlier by the National Company Law Appellate Tribunal (NCLAT) and the decision was upheld by the Supreme Court.

UltraTech has acquired BCL’s plants totalling 6.25 million tonnes per annum (mtpa) in Rajasthan, inclusive of an integrated cement unit and a split grinding unit at a value of ₹8,024 crore, said a company statement adding that this acquisition gives the company access to superior quality limestone reserves and BCL’s subsidiaries in China and UAE stand transferred to UltraTech.

UltraTech has combined the acquired markets with its North zone and West zone operations, which are led by Sudeep Grover and Raju Anklesaria. G. Balasubramaniam, formerly Unit Head, Awarpur, has been moved as Head of BCL’s integrated cement unit.

“The move has been largely made on account of these factors and synergies that will stem from it. These include economies of scale, optimization of costs, both in manufacturing and logistics, coupled with a wider distribution network. The expansion potential that BCL offers will enhance UltraTech’s competitiveness and benefit consumers. On every count it will create value for all stake holders, given the assets in operation. UltraTech is extremely well positioned to turnaround BCL’s operations, given its competence and unmatched experience in this sector,” said the statement.

With the addition of BCL’s plants, UltraTech’s network has grown to 50 plants pan India and its overall capacity currently is 98.75 mtpa with an additional 4 mtpa under commission.

UltraTech shares on BSE closed up 1.97% at ₹4054.70 in a weak Mumbai market on Wednesday while Binani Industries shares closed down marginally 0.12% at Rs. 83.95.