Asian Paints has entered into a binding term sheet with Riddhi Siddhi Crusher & Land Transport (Riddhi Siddhi), Associated Soap Stone Distributing Company (ASD), Raj Kumar Bohra and Nita Bohra to form a joint venture to carry out the business of manufacturing and exporting white cement & white cement clinkers by setting up a manufacturing plant in Fujairah, United Arab Emirates (UAE), the company said in a BSE filing.
The proposed joint venture would be set up with 60:40 partnership between the company and other parties and would carry out the business of manufacturing and exporting white cement and white cement clinker.
The initial capacity of the manufacturing facility, to be set up in Fujairah, would be 2,65,000 tons per annum. In addition, clinker grinding units would be set up in India as well.
The overall investment would be approximately Rs 550 crore, to be invested over the next two years. The cost of the project would be funded through a combination of equity funding by the company & the other parties and external debt financing.
White cement is the key raw material for some of the powder products and undercoats like putty which is a levelling powder product for various substrates. In addition, white cement is used in the home construction & repair segment, for various applications like – tile/marble fixing, sanitary-ware work, repair work, etc. The market for usage in undercoats and in repair/ tile fixing area is growing at 15-20% every year, the company said in a media release.
“Given the synergy of 70% of the white cement being sold through the paint/hardware/tile retailers, this offers Asian Paints a huge opportunity to market white cement to our extensive network of dealers across the country,” said Amit Syngle, MD & CEO of the company.
At present, the company purchases white cement for manufacturing powder products and undercoats in India. The above proposal of setting up the manufacturing facility for white cement is towards fulfilling the company’s long-term requirements to cater to internal consumption and also for selling white cement as a finished product.
Riddhi Siddhi holds mining permits for high – quality limestone mines in Fujairah and is a supplier of limestone. ASD (Golcha Group) is one of the trusted suppliers of certain raw materials to the company.