Comments
It will take at least another three months before UltraTech Cement re-brands and markets product from the recently acquired Jaypee cement plants, an official in the company told BusinessLine .
“There’s a significant quality difference in the cement produced by UltraTech and Jaypee. Also, coal supply issues have to be sorted out at these plants and it will take at least another quarter before production reaches market,” the official who did not wish to be named said.
In June, UltraTech closed its ₹16,189 crore acquisition of the cement plants of Jaiprakash Associates Ltd and Jaypee Cement Corporation Ltd.
These are spread across Himachal Pradesh, Uttar Pradesh, Uttarakhand, Madhya Pradesh and Andhra Pradesh, with a capacity of 21.2 million tonnes.
After the acquisition, UltraTech has 18 integrated plants, one clinkerisation unit, 25 grinding units and seven bulk terminals, augmenting its grey cement manufacturing capacity to 93 million tonnes a year. This makes UltraTech among the largest cement producers globally.
The UltraTech takeover of the bulk of Jaypee’s assets hauled the latter from under its massive debt burden and working capital shortages at its cement plants.
The official at UltraTech said that the former Jaypee assets – now with the Aditya Birla group – are operating at about 10 per cent capacity, against an industry average of roughly 70 per cent. UltraTech’s operating revenues per tonne of cement produced will also be lower till the plants match in capacity utilisation.
At UltraTech’s annual shareholder meeting here on Tuesday, Kumar Mangalam Birla, Chairman, said it would take about three years before the acquisition – the largest deal so far in India – begins to boost the company’s earnings per share.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.