Lafarge Plans $1 Billion Investment in Indian Cement Operations

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Lafarge S.A. (OTC:LFRGY) (Paris, France), the world's second largest cement manufacturer, has announced plans to invest $1 billion in India over the next five years to ramp up its cement production capacity in the country to 20 million tons per year. The company plans to set up three manufacturing facilities, each with a capacity of 2.5 million tons per year, and will also expand its three existing plants to achieve a total capacity of 12 million tons per year.

Lafarge is pursuing an ambitious target of doubling its cement manufacturing capacity in India over the next five years and is planning to acquire 66 efficient concrete plants in places like Bangalore, Delhi, Calcutta and Mumbai. It is also investing $170 million to build a 2 million-ton-per-year cement plant in Mandi near Shimla in the limestone-rich Himachal Pradesh, where demand is slated to soar with the upcoming dam projects on five rivers in the state. The company is also setting up a 3 million-ton-per-year cement manufacturing unit in Alsindi, Himachal Pradesh, with an investment of $225 million. The project is scheduled to be commissioned by 2010.

Lafarge forayed into the Indian market in 1999 with the acquisition of the cement business of Tata Steel Limited (BOM:500470) (Mumbai). In 2001, it acquired cement units from Raymond India (Mumbai). In May this year, Lafarge acquired L&T Concrete, the concrete unit of Larsen & Toubro Limited (BOM:500510) (Mumbai) for $350 million. Its operations in India consist of two cement plants in the state of Chhattisgarh and a grinding plant in the state of Jharkhand with an aggregate production capacity of 5.5 million tons per year. In April 2008, it commenced operations at its greenfield ready-mix concrete plant in Raipur, Chhattisgarh, with a 1.4 million-ton-per-year clinker unit and a 500 ton-per-year cement grinding unit. The company operates an integrated cement facility in Arasmeta, Chhattisgarh, with a 1.6 million-ton-per-year clinker unit and a 1.6 million-ton-per-year cement grinding unit. The manufacturing facility in Jojobera, Jharkhand, has a cement grinding capacity of 3.4 million tons per year.

The recent boom in the infrastructure and real estate segments has provided a significant impetus to the cement industry in India, the world's second largest producer of cement. Domestic demand of cement over the last five years grew at an annual rate of 8.38% as opposed to supply, which grew at a 4.84% during the same period.

View Project Report - 89001054

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.