Why world's top cement maker Holcim is exiting India?

Holcim, which had entered the market 17 years ago, held a 63.19 per cent stake in Ambuja and a 4.48 per cent in ACC, while Ambuja owns a 50.05 per cent stake in ACC.

Switzerland-based world's top cement maker Holcim is making an exit from the Indian market. Gautam Adani's conglomerate clinched a deal to buy Holcim AG's cement businesses in India for $10.5 billion, becoming the country's number 2 cement manufacturer. The divestment by Holcim marks its latest effort to reduce exposure to carbon-intensive cement production and boost its environmental, social and corporate governance (ESG) credentials.

Holcim, which had entered the market 17 years ago, held a 63.19 per cent stake in Ambuja and a 4.48 per cent in ACC, while Ambuja owns a 50.05 per cent stake in ACC.

Ambuja and ACC combined have the capacity to produce at least 70 million tonnes of cement annually, second only to UltraTech Cement, which boasts a capacity of 120 million tonnes. Together, Ambuja and ACC own 31 cement making facilities and employ over 10,700 people.

However, in spite of this, Holcim chose to sell its business in India.

Holcim has also been selling units outside North America and Europe in a bid to sharpen its focus on key markets and diversify into building product areas like roofing.

The company sold its Brazilian operation for $1 billion and also exited Indonesia last year.

Holcim's exit is part of the group's 'strategy 2025' that aims for sustainable solutions for the building materials sector. The significance of cement in the overall group is already declining compared to ready mix concrete, aggregates, roofing, and green building solutions.