AV Birla Group eyes Lafarge SA

After West Asia and Bangladesh, sources say, it may well be that the so-called 'Birlas' will enter the fast growing South African market to further globalise its cement operations.

Lafarge South Africa Holding, a subsidiary of Lafarge SA, has one of the largest integrated cement operations in the region. It has one of the most technically advanced cement production units - Lichtenburg Cement Works - with an annual capacity of over three million tonnes. It also has clinker grinding stations and distribution depots scattered around key provinces of the country. The company also runs 55 ready-mix concrete plants, employing 535 people. The aggregate business unit operates 20 quarries located all across South Africa to service the country's large construction sector.

Sources say Aditya Birla Group are doing initial reconnaissance but stress that a deal may still be some time away. The enterprise valuation of Lafarge's business - the sources say - may be close to $800-900 million. Interestingly, the Birlas may not be the only ones in the race. There could be a few European companies and some other Asian players joining in. India's Shree Cement, the largest player in the north, is also believed to be in the fray. When contacted, the Aditya Birla Group spokesperson told India's Business Standard: "As a matter of company policy, we would not like to comment on market speculation."

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