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Birla Corporation Limited has acquired the cement Business of Reliance Cement Company Private Limited

Birla Corporation Limited, the flagship company of the M P Birla Group and a leading cement major completed the acquisition of the cement business of Reliance Infrastructure Ltd (RIL) on 22nd August, 2016. The Company had acquired l00% shares of Reliance Cement Company Private Limited (Reliance Cement), a subsidiary of RIL. After this acquisition, Reliance Cement became a wholly-owned material subsidiary of Birla Corporation Limited. The acquisition was funded through existing cash reserves and incremental debt.

In February 2016, Birla Corporation Limited had announced the agreement to acquire the entire cement business of RIL, for an Enterprise Value of Rs. 4,800 crores. This acquisition provided Birla Corporation Limited with the ownership of high-quality assets, taking its total capacity from 10 MTPA to 15.5 MTPA. The Company's expansion potential will also be significantly enhanced by valuable mineral concessions in several States, in addition to Madhya Pradesh.

Birla Corporation Limited acquired 3 cement plants from Reliance Cement Company private limited, an integrated cement plant at Maihar (Madhya Pradesh) and grinding units at Kundanganj (Uttar Pradesh) and Butibori (Maharashtra), with an aggregated capacity of 5.58 MTPA of cement and 3.30 MTPA of clinker. With state-of-the-art technology, strategically located raw material sources, captive coal mine and efficient operating parameters, it had already established technical capability for producing top-end high quality product. The mining lease at Mukutban will enable the Company to set up a clinker unit of 3 MT in the foreseeable future.

Shri Harsh V. Lodha, Chairman, Birla Corporation Limited, stated that he is extremely pleased that the Reliance Cement business will be part of the M.P. Birla Group. "Reliance plants add a lot of strategic value to the existing cement business of Birla Corporation. We have got not only modern and efficient plants but also excellent opportunity of synergizing the business of Birla Corporation and Reliance Cement to gain maximum advantage in the region we operate in and increase our share in the rapidly growing cement market. That apart, there is scope for further optimisation of the operation of Reliance Cement that would yield substantial benefit to the Company."

Referring to the 'complementarily' of the acquisition, he said it is a natural fit with Birla Corporation's footprint in Central and Eastern India. The Company can gain a sizeable presence in the profitable Western market by expansion of the Mukutban operations. The economies of scale and synergies will help the Company invest in brand, channel, manufacturing, product and marketing innovations for creating greater value for all stakeholders.