LAFARGE KI PASAND - NIRMA!
By Ruma Dubey
Today, if Nirma had remained listed on the bourses, it would have easily been the top gainer; so would Lafarge.
Nirma got delisted in 2010 as it stated then that it wanted to foray into a range of non-consumer businesses – pharmaceuticals, chemicals and to set up a greenfield cement plant. At that time, people felt that Nirma was over-reaching, too much ambition would kill it. But once again, Nirma has left everyone stunned.
Nrima taking over Lafarge India’s assets for $1.4 billion or Rs.9300 crore comes as a wonder – one cannot help but hear “washing powder Nirma, ddodh si safedi…” playing out in the mind. If you look at this phenomenal journey of Nirma, one cannot help but once again get baffled by the possibilities of human endeavor.
Karsanbhai Patel’s story is inspiring to say the least. While working as a lab technician in the Lalbhai group company, Patel developed a detergent powder in his small room. He first started selling it for Rs.3/kg in his town in Gujarat, Ruppur. While going to work on a bicycle, Patel used to drop some 10-15 packs to consumers. Soon word of mouth made it a huge across Gujarat. He then named it Nirma, after his daughter Nirupama, whom he lost in a road accident. Her name is now immortalized and the company, from a 100 sq.feet backyard has grown into this conglomerate – one of the best success stories of our times.
And it is not as though Lafarge is quitting India. It continues to hold the dominant cement player position as its LafargeHolcim plant, with ACC and Ambuja has a combined cement capacity of over 60 mtpa. This selling was art of the directive from CCI to sell its 5 mtpa unit in east India to comply with competition rules. But Lafarge wanted to sell its entire 11 mtpa plant as one block to allow transfer of mining rights. It was first agreed to sell it to Birla Corp in 2005 for Rs.5000 crore but that deal did not take off. And finally now, it managed to sell its India assets. There were bidders like JSW Cement, Piramal Group, Mexico’s Cemex, China’s Anhui Conch Cement, PE funds and Nirma. No one had expected Nirma to emerge victorious but in the last stage it is said to have got super aggressive and thus went on to win the deal.
With this acquisition, Nirma gets 6 plants – one each in Rajasthan, Haryana, West Bengal; two in Chhattisgarh and one in Jharkhand. What is very strange and kind of watering down the super rise of Nirma is its official website. The company has not listed cement anywhere in its site; in fact its industrial products and major plants does not even make a mention of cement. The last updated balance sheet is of FY13. Agreed that it is no longer listed but even for unlisted companies, having an outdated website, especially in today’s online world, is a big no-no.
Nevertheless, this buy of Nirma has catapulted the company into the big league and it will be watched as a serious cement player. For those in the market, any news on unlisted companies is no news but that fact is that this is a big news for us within India and a big news for those seeking motivation and inspiration.
Let’s see now if Nirma Cement will get listed?