Page 35 - CONSTRUCTION VISION July August 2017 issue
P. 35
INTERVIEW
ditya Birla Group chairman Given that two large deals are based on the premise of
Kumar Mangalam Birla, including Lafarge and Jaypee are infrastructure development.
Awhose UltraTech Cement on done do you see more scope for
Grasim still gets the holding
Thursday completed the acquisition consolidation in the industry?
company discount. Right?
of Jaypee group's six cement plants
I don't think that there is any trigger
and five grinding units for 16,159
for consolidation now.
crore, spoke in an interview about It's a holding company one way but it
When do we see UltraTech hitting
the group's business plans. Edited has operating assets. So I will call it
100 mt of cement capacity?
excerpts: a quasi-holding company. I think that
100 is actually a mirage. We never the task for the management of
What does this deal mean for
said 100. It's basically about the Grasim is to ensure that discount
UltraTech?
value that we create. I am sure we goes down substantially.
This deal primarily gives us complete
will go beyond 100 at some point in At a point of time, you were
geographical coverage including
time. looking overseas for acquisition in
eastern Uttar Pradesh and coastal
How much time will it take the the cement space. Is the plan still
Andhra Pradesh.
acquisition to be value accretive? on?
We didn't have a presence there.
It will take eight quarters for it to be No. Now our focus is completely on
In some States, we were there but
EPS accretive. India. Now the action is in India so
not strong enough like in that focus has to be here.
Cement prices are quite
Uttarakhand and Himachal Pradesh.
depressed. What is your take on When can we expect the payments
Also, the complexity of setting up
the matter? bank to start?
greenfield assets is still there.
Prices are very much a product of It will be sometime in July but it will
What will your focus be now?
demand and supply. It is very difficult be a phased launch.
Now the focus is on upgrading these to make a projection. This is an
What's the update on Idea-
assets, retrofitting them, improving existing plant that we are taking over.
Vodafone merger?
efficiency and utilising the capital. There is no new capacity addition so
Merger of Idea and Vodafone is on
I don't see prices going up or down
Whole focus is now on consolidation track and is expected to be
after this transaction.
and getting returns out of these
completed by the middle of 2018.
assets. We will invest a further 500 Demand for housing is not picking
Are you seeking a bailout package
crore to 700 crore spread over the up. Is it affecting cement demand?
like other telcos?
next two years.
Housing is one sector that is yet to
Idea has made some representation
How does this deal impact the take off. It has a big bearing on
on the issue to the Government.
financials? cement growth. One is banking on
housing infrastructure development GST rollout starts July 1...?
Even after such a significant
when we do deals like this one. I
investment, the financials are very GST is a structural move in the right
think affordable housing needs to
strong. Our debt to equity is about direction. It could take a few months
reach a scale to affect demand for
0.6, debt to EBITDA is 2.6. to settle down. It's one of another
cement but that trajectory is great not fundamental shift and it will make us
Generally, after such big acquisitions,
only for cement but the economy as a much more robust economy.
the financials are stretched so it
a whole.
speaks volumes about the financial What's happening in the financial
We see a policy push for
health of the company. services space?
infrastructure but don't see things
Are you looking at refinancing Our financial services business will
moving on the ground?
your loans for UltraTech? be listed in the middle of August and
Some sectors are good like roads, Premji Invest has come in as value
No, most of it is done and most of the
railways, metros, irrigation but there investors valuing ABCL at 32,000
financing is at sub 8% level.
is headroom for more development in crore.
the infra space. Investments like this
JULY-AUGUST 2017 CONSTRUCTION VISION 33
