Adani, JSW Cement, and ArcelorMittal Vie for Vadraj Cement
Cement

Adani, JSW Cement, and ArcelorMittal Vie for Vadraj Cement

Vadraj Cement, an ABG Shipyard group company, is up for sale under the Insolvency and Bankruptcy Code (IBC) process. Adani Group entity, Sajjan Jindal-owned JSW Cement, and ArcelorMittal Group are among the potential buyers.

The Bombay High Court had ordered the winding up of Vadraj Cement after a trade creditor dragged it to the court for recovery of dues. However, the court later transferred the debt resolution process to the National Company Law Tribunal (NCLT) based on a bank's petition.

Lenders expect potential buyers to offer between ?2,000 crore and ?2,500 crore for the company, which has ?7,000-crore debt.

Vadraj Cement has an integrated cement manufacturing facility comprising a 10,000 TPD (tonnes per day) clinker unit at Kutch and a 6-million-tonne (mt) cement grinding unit at Surat in Gujarat. It also has limestone mining rights and a captive jetty in Kutch. However, both the cement units are not operational because the captive power plants that supplied fuel to the cement plants were sold upon a loan default.

If ArcelorMittal emerges as a successful bidder, it will mark its entry into the cement sector. The Vadraj Cement unit in Gujarat is close to the steel plant that Arcelor acquired from Essar Steel. The cement plant will complement its steel business since the steel slag has properties that are suitable for making cement, and is used to blend with clinker to lower the clinker factor and costs.

Adani and JSW Cement have declared plans to raise manufacturing capacity over five years. Adani proposed increasing the capacity to 140 mt while JSW Cement proposed raising output to 60mt in five years.

Currently, the Aditya Birla Group, which owns Ultratech Cement, is India's largest cement maker, with a 137.5 mtpa manufacturing capacity. It is followed by ACC and Ambuja Cements, both owned by Adani Group, which has a 67.5mt capacity.

Vadraj Cement, an ABG Shipyard group company, is up for sale under the Insolvency and Bankruptcy Code (IBC) process. Adani Group entity, Sajjan Jindal-owned JSW Cement, and ArcelorMittal Group are among the potential buyers. The Bombay High Court had ordered the winding up of Vadraj Cement after a trade creditor dragged it to the court for recovery of dues. However, the court later transferred the debt resolution process to the National Company Law Tribunal (NCLT) based on a bank's petition. Lenders expect potential buyers to offer between ?2,000 crore and ?2,500 crore for the company, which has ?7,000-crore debt. Vadraj Cement has an integrated cement manufacturing facility comprising a 10,000 TPD (tonnes per day) clinker unit at Kutch and a 6-million-tonne (mt) cement grinding unit at Surat in Gujarat. It also has limestone mining rights and a captive jetty in Kutch. However, both the cement units are not operational because the captive power plants that supplied fuel to the cement plants were sold upon a loan default. If ArcelorMittal emerges as a successful bidder, it will mark its entry into the cement sector. The Vadraj Cement unit in Gujarat is close to the steel plant that Arcelor acquired from Essar Steel. The cement plant will complement its steel business since the steel slag has properties that are suitable for making cement, and is used to blend with clinker to lower the clinker factor and costs. Adani and JSW Cement have declared plans to raise manufacturing capacity over five years. Adani proposed increasing the capacity to 140 mt while JSW Cement proposed raising output to 60mt in five years. Currently, the Aditya Birla Group, which owns Ultratech Cement, is India's largest cement maker, with a 137.5 mtpa manufacturing capacity. It is followed by ACC and Ambuja Cements, both owned by Adani Group, which has a 67.5mt capacity.

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