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B K Birla group stalls cement business revamping

India's diversified B K Birla group has made no headway on the planned restructuring of its cement business due to an upturn in the industry and uncertainty over succession at a key cement firm, a company official said on Tuesday.

"We have made no progress so far," said the senior official who requested anonymity.

"The industry has started doing well now. There is no anxiety for us now. We may wait till next year to see if we can get a better price," he said.

One of India's oldest business houses, the B K Birla group owns more than five million tonnes of cement capacity, most of which is concentrated in flagship firm Century Textiles Industries.

The firm was earlier in talks with Britain's Blue Circle Plc for selling one of its cement units, but the talks have since broken down, the official added.

"We are not actively seeking any opportunities now," he said.

The outlook for India's cement industry has brightened in recent months after a spate of product price hikes.

Stock markets have also reacted positively to the price increases, pushing up share prices of cement firms.

Analysts said this could provide temporary relief to small and medium-sized firms who were under pressure to sell assets when the industry was not doing well.

Ownership tangle

The source said there was also uncertainty over succession at Century Textiles and that this was complicating matters.

Unlike other firms in the group where they are in a majority, B K Birla's family is just one of three to four large shareholders in Century Textiles.

Other members of the widespread Birla clan also own large stakes through a complex cross-holding pattern and the succession issue is still open. Without a proper succession the group will find it difficult to carry out its restructuring agenda.

Century Textiles was forced to look at restructuring due to weakness in the cement industry earlier this year, which was affecting the company's performance.

Industry looks to L&T

Analysts said many firms with restructuring plans are awaiting the outcome of similar efforts at Larsen & Toubro, India's largest cement firm with 15 million tonnes of capacity.

L&T is in the process of seeking a partner for its cement business and many global firms are expected to participate.

Analysts said given L&T's size and reach, foreign firms would prefer it over smaller sized players.

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