Dalmia Bharat Cement eyes premiumisation; acquisitions on radar

Dalmia Bharat Cement may soon abandon the mass cement segment as it tries to move up the value chain with premiumisation while weighing options on organic and inorganic growth to enter newer markets of North India. "Premium and super-premium cement brands account for 60 per cent of revenues and in the next two years it would rise to at least 80 per cent. Ideally, we will go 100 per cent," Dalmia Bharat Senior Executive Director Marketing B K Singh said. He was in city to launch a new premium cement brand 'Dalmia FBC'.

The company is currently present in East, Northeast and South India. "It has been the objective of this company to emerge as a pan-India player and not limit itself to certain geographies," Singh said.

With the fate of Binani Cement hanging in the balance, Dalmia Bharat Cement had not ruled out options of acquisition of other cement companies or units for the North India foray.

We had been trying to enter north (India) and attempt for Binani was a step towards that, Singh said.

The company, however, declined to divulge alternate plans for foray into the northern Indian market if its bitter legal battle with UltraTech under the Insolvency and Bankrupcy Code to win over Binani Cement fails.

The companys consolidated production capacity stands at 26 million tonne per annum (mtpa) but is limited to south, east and the northeast.

If Dalmia Bharat Cement wins over Binani Cement, it can open a readily available market comprising Rajasthan and Gujarat for the company giving it a sizeable presence with its 6.25 mtpa cement plant in Rajasthan. Acquisition has been a key strategy for the company in scaling up its business as well as enter new geographies.

Last year, it acquired only integrated clinker capacity in Bihar Kalyanpur Cements, marking its foray into the state.

As of now, Dalmia Bharat is the only cement company which owns at least one plant in each of the four key eastern states of West Bengal, Bihar, Jharkhand and Odisha.

"We command a 15 per cent market share in the east making it the second largest cement company in this zone while its consolidated market share in South India stands at 11-12 per cent," Executice Director, sales and marketing (east) Indrajit Chatterjee said.

Its bid to enter the west Indian cement market has also been successful after it acquired the three million tonne stressed assets of Murli Cement which is expected to open up the Maharashtra market for the company.

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Both the acquisitions could be ready by the third quarter of this year, the company expects.