Lafarge to quit India, puts entire 11 mtpa on the block.

Global cement major LafargeHolcim has put its entire 11 million tonne per annum annual capacity in India on the block after its deal with Birla Corporation (BCL) to sell 5.1-mtpa capacity hit a roadblock.

A LafargeHolcim statement said on Thursday that the group was no longer in talks with BCL for the sale of the Jojobera and Sonadih cement plants in eastern India.

The merger of Holcim’s subsidiaries – ACC and Ambuja Cements – and Lafarge India would have made it the dominant player in the eastern region, with the ability to dictate prices.

The Competition Commission of India, therefore, had instructed Lafarge to sell its units there. Following this, Lafarge signed an agreement with BCL for the sale of the Jojobera and Sonadih plants.

LafargeHolcim’s sale of the plants, necessitated after the global merger of French cement maker Lafarge and Swiss building materials company Holcim, ran into trouble as the new Mines and Mineral Development Act does not permit transfer of captive mines along with sale of assets.

Since the transfer of mining rights was critical for the sale, LafargeHolcim was obliged to submit an alternative remedy to CCI, it said. “The alternative remedy (to sell 11 mtpa) is now under CCI consideration. The Group remains in dialogue with the CCI and will communicate any further updates to the divestment process in India,” it added.

HBL