Aditya Birla Group potential buyer of Lafarge’s S African cement unit

Aditya Birla Group could be the potential buyer of Lafarge SA, cement business in South Africa, in a deal that may fetch the Paris-based company around $700 million to $800 million (Rs3,690 crore to Rs4,217 crore), Bloomberg yesterday reported, citing two people familiar with the situation.

Lafarge, the world's biggest cement maker, is seeking a buyer for its cement operations in South Africa in order to reduce its debt, said the news agency.

Lafarge's cement business in South Africa is one of the major cement producers in Southern Africa. Its Lichtenburg Cement Works is the largest and one of the most technically advanced cement production facilities in the country.

The company has an established cement clinker grinding station and cement distribution depot at Richards Bay on the north coast of KwaZulu-Natal province. In addition, major cement distribution depots are located at Kaalfontein on the north-east side of Johannesburg and at Polokwane in the Limpopo province.

With the commissioning in 2009 of Randfontein Grinding Station and the new kiln at Lichtenburg Works, Lafarge's cement business unit has a production capacity of over 3 million tons of cement per year.

Lafarge is seeking to reduce its €14.3 billion debt, and has recently divested some of its gypsum assets and cement and ready-mix plants to help meet its target of reducing debt by about €2 billion by the end of this year.