Binani Cement hopes to buy Indonesian coal mine soon
Friday, 06 Nov 2009
Business Standard reported that Binani Cement is hopeful of concluding the transaction for coal mine acquisition in Indonesia in the next 2 months to 3 months.
Mr Vinod Juneja MD of Binani Cement said that "We are still negotiating, but hope to conclude the deal in the next 2 months to 3 months."
Binani Cement, which has 6 million tonnes installed capacity now needs to import 0.6 million tones to 0.7 million tonnes of coal to feed its plants in a year. The company also plans to put up a 2.5 million tonnes per annum clicker plant in Gujarat with an investment of INR 800 crore and is awaiting for the state government's mining policy to take the plan forward.
Mr Juneja said that the company was looking to acquire a mine, which might meet 70% to 80% of its total coal demand for 10 years to 20 years. Binani Cement plans to put up a subsidiary in Singapore which would take the company's acquisition plan forward. The company has chalked out a plan to double its cement capacity in the next 2 years through organic and inorganic routes.
He said that we are looking for acquisition. We have appointed an investment banker which is doing the due diligence for a target in Turkey.
Mr Juneja said that the Indian cement industry may is witness margins getting squeezed if the coal and energy prices go up further. He said that "Margins till September has improved but it will come down if coal and energy prices escalate. However, if petroleum prices go up, coal prices will also increase."
He added that Binani's current capacity utilization stood at 95% and hoped the company would be able to maintain the tempo in the remaining period of the current fiscal as the demand for cement from North India would remain firm till the end of the Commonwealth Games in October 2010.
