In India, M&A is not a focus area: Bruno Lafont

Lafarge, the world’s largest building materials company, is saddled with high debt and is going through a global restructuring. Its production has been hit in Europe amidst the euro zone crisis, resulting in layoffs and shutdowns. For its Global Chairman and CEO, Bruno Lafont, these are challenging times in which he has initiated a global divestment exercise. But India is still a growth market, he told Business Standard. Edited excerpts:
In the middle of a big slowdown in Europe and massive drop in production, how strategic are emerging markets like India becoming?
Very. We will continue to expand our business in India. In a period of 15 years, that we have been in India, we have an 8 million tonne capacity. In both our cement business and the concrete and aggregate business, we see huge potential in India.
You started your India operations with three big acquisitions. But over the years, there’s a feeling that you have slowed down. Your projects have got stuck over land, environmental issues. Isn’t it frustrating to do business in India?
We are, honestly, not worried about these delays. These are operational challenges and we have a strong India team who will tackle them. These are normal issues, nothing exceptional. We will grow in India mainly by greenfield projects or by expanding our existing plants where ever that’s possible.
India like Brazil is a key market for you. Why not pursue inorganic opportunities here for a faster growth rate? Is it because the assets are not available? Or are they too expensive?
M&A is not a focus for us in India. For us, the most exciting thing is to grow on our own. It’s a more solid strategy for our investments today.
What are your investment plans then for India in the short-term?
We do not disclose country wise plans. We have added 2 million tonnes in the recent past. We are happy with our growth and would like to maintain the momentum every year.
You are focused on the east. India is a large country. Are you looking at geographical diversification to west coast or maybe even south?
We focused on east because we wanted to start by focusing on just one region. Building materials is a regional business. So, our strategy has been to focus one region and then expand and consolidated in that concentrated region. We have taken limestone reserves in the past, so we look at integration. But we are and will look at newer areas, also for greenfield. After east, we are looking at north already.
The government is focusing on affordable housing. Is it a new area that Lafarge would like to look into?
Absolutely. We are already looking at a new solution of mud houses using cement materials. They are also going to address the sustainability issue.