Holcim’s CEO hints that the company was conservative on its India strategy

The exit of Holcim from India, where it had two very successful companies, has been a surprise by way of timing. Just as the Indian cement sector is taking off on the back of higher infrastructure spend, it made perfect sense for its operations – Ambuja Cement and ACC – to move into top gear. However, it has chosen to sell out completely to the Adani group for $10.5 billion.  

Responding to a query from Business Today on whether Holcim had been too conservative on its India story, its global CEO, Jan Jensich said, “We could possibly have done more in India but in our opinion, we had a good strategy.” Holcim entered India in 2004 through the buyout of Ambuja and later ACC.  

Today, Holcim sits on a capacity of 70 million tonnes (the overall number nationally is around 500 million tonnes) with a pan-India presence and two strong brands. However, the expansion strategy has bene completely organic with the company giving the miss on some high-quality assets that came their way through the insolvency and bankruptcy code. Among these were Binani, Jaypee and Murli, that its competitors like UltraTech, Shree Cement and Dalmia acquired. Organic growth has been at best modest with the gap between them and market leader, UltraTech only widening with smaller players narrowing the distance with Holcim. 

According to Jensich, Holcim had a good strategy in India. “We launched new products and moved on digitisation. In fact, we have also announced two new cement plants as well,” he said. On the specific issue of competition being more aggressive, he told Business Today that Ambuja and ACC had good brands and “Holcim was quite happy with what it had done in India.” 

From a global strategy point of view, the objective has been to go green and adopt the decarbonisation strategy. For Holcim, it is a part of Strategy 2025, which is leading with sustainable building solutions. Earlier, it has either exited or divested its assets in markets such as Brazil, Sri Lanka, Northern Ireland, Russia and Malaysia. This has been accompanied by acquiring assets in US and Europe on the green platform to bolster its revenue from solutions and products. 

Also read: Adani Group to acquire Holcim India business for $10.5 billion

Also read: Adani to acquire Holcim’s India cement businesses; will become the second-largest player 

Also read: Adani Group shares zoom up to 8% on deal to buy Holcim India assets

Also read: Why ACC, Ambuja Cements shares rose up to 8% today