JK Cement brass held talks with Holcim

Top officials of JK Cement, the second-largest white cements producer in India, met their counterparts in Holcim AG, the Switzerland-based cement major, early this month, two people familiar with the development said.

“The discussions included acquisitions and joint ventures,” said one of the sources.

Prashant Sheth, assistant vice president of JK Cement, denied any such development.

The promoters of the company, the Singhanias, own 65.3% stake in the company.

The company management had recently indicated that it is going to put up a project in Fujairah, United Arab Emirates, which will have a capacity to produce 2 million tones of grey cement at a cost of Rs1,400 crore.

JK Cement is also increasing capacity at its Mangrol, Rajasthan plant by 2.2 million tonnes per annum.

The project will be completed by September 2012.

It is also planning to install a grinding unit in the north with a capacity to produce 2.5 million tonnes, which will increase the company’s grey cement production capacity in India by a third to 10 million tonnes from 7.5 million tonnes now.

The cost of expansion is estimated at Rs1,500 crore including the expenditure to augment its captive power plant.

JK Cement is also looking to raise fresh debt of Rs800 crore. The company’s consolidated debt currently stands at Rs1,351 crore, and has a debt-equity ratio of 0.79.

An analyst said JK Cement has capacity that’s yet to come on stream in the southern market, “which is what they are perhaps looking to sell”.