ADAG planning to acquire Cement manufacturing plants

The Reliance Anil Dhirubhai Ambani Group (ADAG) is looking for acquisitions to start its cement business much before it completes its 4,000 MW mega power project at Sasan in Madhya Pradesh, which would provide the fly ash used to make cement.

The company has started talks with various small and medium companies through a merchant banker to shortlist acquisition targets.

The group has also appointed Anil Singhvi, former managing director of Ambuja Cements, vice-chairman of Reliance Natural Resources, the company which will set up the cement business. ADAG's bankers have also held talks with the Mehta group, which has two facilities, Gujarat Sidhee Cement and Saurashtra Cement in Gujarat, with a total capacity of 2.3 million tonnes.

An email sent to Jay Mehta, the group's executive vice-chairman, on Friday did not elicit a response. Mehta could not be reached on his office number either. The coal-fired Sasan project is scheduled to go on stream in 2012-13. But a source familiar with the negotiations said, "the group is looking at the cement business beyond just utilising the fly ash coming out of Sasan.

"Initial discussions with Birla Corporation, the flagship of the M P Birla group, came to nothing. Birla Corporation has a cement manufacturing capacity of 5.7 million tonnes, of which the facility located at Satna, close to Sasan, manufactures 1.5 million tonnes.

ADAG "declined to comment" on queries sent by the newspaper.