Ambuja Cements Ltd has acquired 60 per cent stake in fly ash maker Dirk India Pvt Ltd from its existing promoters for Rs 16.51 crore, according to the company disclosure to the Bombay Stock Exchange on Wednesday.
Based in Maharashtra, Dirk India is into fly ash manufacturing and marketing, with a capacity of 2,500 TPD. The company also has a subsidiary, Dirk Pozzocrete (MP) Pvt Ltd, which operates in the same space. Fly ash is an industrial products residue, used as a relatively low-cost input for cement manufacturing.
Post-acquisition, Dirk India and Dirk Pozzocrete will become subsidiaries of Ambuja Cements.
On the Bombay Stock Exchange, shares of Ambuja Cements closed at Rs 145.95, up 0.34 per cent from the previous close.
Dirk India was formed by the UK-based Dirk Group in 2000 and has a workforce of more than 500 people, according to its website.
In June this year, Ambuja Cements had struck a similar small-ticket deal in the building material space. The company expanded in the South Asia region with the acquisition of 85 per cent stake in Nepal’s Dang Cement Industries Pvt Ltd for Rs 19.13 crore.
These deals took place even as local cement manufacturers are faced with sluggish demand due to the slow uptake in infrastructure projects while the real estate market is facing lower buying interest as interest rates have skyrocketed.
The volume growth of the top three Indian cement companies – ACC, Ambuja Cements and Ultratech Cement – was pegged at 19.7 per cent, 2.7 per cent and 3.4 per cent respectively, during August 2011.
“The volume growth is largely on account of the low-base affect and not on account of a real pick-up in cement offtake. On a month-on-month basis, all large players have actually posted de-growth in their dispatches,” a recent report by brokerage firm Sharekhan states.
Ambuja Cements was acquired by global cement major Holcim (which also owns ACC in India) in 2006 and has a cement manufacturing capacity of around 25 million tonnes a year.