Cemex, the world's number three cement manufacturer, is looking at India as one of the opportunity markets for future growth. As and when the move materialises, the world's top five global cement manufacturers will be present in the burgeoning Indian market.
In a forward-looking statement after announcing the company's results last weekend, the chairman of the Mexican company, Lorenzo Zambrano, said that along with China, Russia and Brazil, India had a "great future potential " because of its enormous size.
He added, "We have no presence (in India), so that is an opportunity for us in the future."
The chairman's statement confirms the buzz in the Indian cement industry regarding the Mexican company's inevitable entry into the domestic cement industry. This was given further credence after HeidelbergCement, the world number four, entered the market in a joint venture with Indorama Cement.
The other three top multinationals that have already started operations in India are France's Lafarge, Holcim from Switzerland and Italy's Italcementi.
"The Indian market of about 150 million tonnes per annum is the biggest in the world after China. With a growth of 10 per cent per annum, it is also one of the fastest growing. It is obvious that if Cemex wants to expand, it has to set up shop here," said a senior executive at a leading Indian cement company.
It is not that the Mexican company, whose net income in 2005 was $ 2.1 billion, has not tried to enter the Indian market.
In fact, between 2002 and 2004, Cemex had twice opened talks with the BK Birla Group to acquire the latter's Mangalam Cement.
However, differences over valuations hampered the talks.
Post the Holcim-Gujarat Ambuja Cement deal earlier this year, valuations are running high in the Indian cement sector.
"It is only after a decade that the Indian industry is seeing good times with record prices and high demand. So though there might be willing sellers, it won't come cheap for Cemex," pointed out an industry expert.
While none of the industry obervers is willing to hazard a guess, fingers are pointed at the smaller units as the potential targets for Cemex.
Lafarge was the first cement multinational to enter the Indian market after acquiring Tisco's cement plants in 1999. Later in January 2001 it acquired the cement business of Raymond. In 2000, Italcementi entered into a joint venture with Zuari Cement.
Swiss player Holcim formed its base in India after taking over ACC in 2005 and later GACL this year. Heidelberg was the latest to join the race, with a joint venture deal with Indorama Cement in March.
Cemex has operations in 50 countries across the world. Last year, it produced 80.6 million tonne of cement and 69.5 million tonne of ready-mix concrete.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Discussion Group