UltraTech’s decision to pay more for Jaiprakash Associates cement units is to expand its own geographical footprint.
Post-completion of the deal, in 12 months, UltraTech said its reach will expand to new growth markets, including Satna cluster (in Uttar Pradesh and Madhya Pradesh), Himachal Pradesh, Uttarakhand and coastal Andhra Pradesh.
UltraTech’s production capacity would increase to 91.1 mtpa, including its overseas operations.
In a statement, the company said: “The operations will be strengthened by the consequent technological upgradation and enhancement in capacity utilisation on a year-on-year basis, creating synergies in manufacturing, distribution and logistics leading to economies of scale.”
It also plans to focus on improving efficiencies by reducing the lead time to markets, enhancing competitiveness and creating value for its shareholders by acquiring ready-to-use assets.
Debt reduction at JP Manoj Gaur, Executive Chairman, Jaypee Group, said the Group is determined to tide over the turbulent times caused by economic slowdown by reducing the debt through disinvestment.
Post the UltraTech deal, the Group would still retain 10.60 mtpa capacity in Madhya Pradesh, Uttar Pradesh, Andhra Pradesh and Karnataka, he said.