Binani Cement: Concrete gambit

Conventional thinking is that cement is a localised business, and you’re best placed manufacturing and selling it in your own backyard. Trust Managing Director Vinod Juneja to challenge conventional thinking. In early 2008, Binani Cement Ltd. (BCL) went on to acquire cement companies in Dubai and China. “By having a presence in different markets we can de-risk the business,” says Juneja.

Juneja is confident about the strategic location of his overseas units, which could help him address a fair portion of the globe. Via Binani Cement Factory LLC in Dubai (on the coast), in which BCL has picked up a 49 per cent holding, Juneja can tap into the neighbouring export markets of Africa and West Asia. 

The Buyout Edge Acquisitions: Krishna Holdings Pte, Singapore (2008); Binani Cement Factory LLC, UAE (2008) Price tag: $41 million* Financing: Through debt Benefits derived: Access to local markets, raw materials, Integration achieved: Started importing clinkers from India *Industry estimates

He has also succeeded in setting up an outpost in China via his controlling stake in the Singapore-incorporated Krishna Holdings Pte; this company owns 70 per cent in Shandong Binani Rong’an Cement Co. Analysts reckon Binani would have paid around $30 million for the Dubai acquisition and $11 million for the Chinese cement plant.

The coastal location of both plants (Dubai and China) allows BCL to export—and, that too, at a minimum cost of transportation. BCL will now set up a clinker-grinding plant in Mauritius with a capacity of onemillion tonnes. This plant will also cater to Asian and African markets. The advantage of having a plant in Mauritius is that it is a tax haven; the same applies to the units in Dubai and Shandong in China.

— Virendra Verma