Lafage buys L&T concrete for RS1480cr

French cement company Giant Lafarge today bagged Larsen & Toubro’s ReadyMix Concrete (RMC)business (L&T Concrete) for Rs 1,480 crore. Through this acquisition, Lafarge will gain control of 66 concrete plants located across India and garner a market share of around 25 per cent.the acquisition would increase its earnings per share from 2009. With this acquisition Lafarge claimed it would become the leader in India’s readymix concrete (RMC) market.
Though the RMC market is now at a nascent stage in India, it is felt that it has strong potential as the Indian construction market is developing to meet rising demand for housing and infrastructure. Lafarge said the acquisition would be an important step to develop its concrete business in the emerging markets.It is also expected to provide the group with an excellent platform to develop further its concrete business in the fast growing Indian market.
Lafarge entered the Indian market in 1999 with the acquisition of Tata Steel’s cement business. This buyout was followed by the purchase of the Raymond cement facility in 2001. At present, Lafarge has three cement plants in India, including two units in Chhattisgarh and a grinding plant in Jharkhand.Lafarge’s total cement production capacity in India stands at around 5.5 million tonnes, and the group has launched an expansion programme to more than double its capacity in the next five years.Operations at its first greenfield readymix concrete plant started in April this year, and the group is building a plasterboard plant in north India, with an annual capacity of around 10 million square metres. The company is present in key markets that include Delhi, Calcutta, Mumbai and Bangalore.It was in December last year that L&T decided to hive off its RMC business into a separate company called L&T Concrete. L&T’s capacity in RMC is over 4 million cubic metres. It is understood that Holcim was also interested in L&T Concrete. This, however, could not be independently verified from the group.
Commenting on the acquisition, Lafarge chairman and CEO Bruno Lafont said, “Lafarge was the first in its industry to move into aggregates and concrete in a significant way, over 10 years ago, and to develop a unique expertise in creating value in the concrete business. With this acquisition, we are taking a pioneering step in the emerging Indian market.”