Sinoma International Engineering of Hong Kong has picked a majority stake in Chennai-based LNV Technology that makes cement factory equipment.
The Hong Kong company is a subsidiary of China National Material Group — known as Sinoma International Engineering — a multi-billion dollar conglomerate with diversified operations and one of world’s largest manufacturers of cement and cement equipment.
Sinoma Hong Kong has taken 68 per cent in LNV Technology for Rs 130-crore. The balance will be held equally between V. C. Rao, Managing Director of LNV, and L. V. Technology of Thailand.
The acquisition will help LNV Technology expand its operations in India and abroad and diversify into engineering-procurement-construction (EPC) contracts for cement factories, Rao said at an event on Thursday to sign the deal. Under the terms of the agreement, the present management will continue for five years.
Growing output
According to official estimates, India’s cement production capacity is set to double to over 750 million tonnes a year in the next seven years with demand growing to 640 million tonnes from the present 250 million tonnes. Sinoma’s technological and financial muscle will help LNV exploit this opportunity. Sinoma has significant expansion plans in India. It will invest over $10 million in the next few years and scale up as business grows, Rao said.
Song Shoushun, who has taken over as Chairman of the LNV Technology-Sinoma joint venture, said that since 2000 Sinoma has set up over 400 cement production lines of more than 5,000 tonnes a day. It is associated with much of cement production capacities established in China.
Liu Zhijiang, Group Chairman, Sinoma Techology and Equipment, said the company, with presence in over 60 countries, has finalised plans for India, the second largest cement market after China.
Though a late entrant into India, it expects to scale up fast, he said.
In China, where more than two billion tonnes of cement is produced annually, Sinoma has more than 80 per cent market share in equipment supply and nearly half the market share in markets elsewhere.