SUNBIZ

Vinod Patel Buys 47 Per Cent Shares In Pacific Cement

Vinod Patel Group has further strengthened its presence in the building and construction sector. It has become the 47 per cent shareholder in Pacific Cement Limited. Vinod Patel Group bought
15 Sep 2014 10:45
Vinod Patel Buys 47 Per Cent Shares In Pacific Cement
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Vinod Patel Group has further strengthened its presence in the building and construction sector. It has become the 47 per cent shareholder in Pacific Cement Limited.

Vinod Patel Group bought the 47 per cent shares from South Pacific Cement Limited which was Fijian Holdings Limited’s joint venture partner in Pacific Pacific.

Following this change, Pacific Cement Limited will be owned by FHL (51 per cent) and Vinod Patel Group (47 per cent). The rest of the shares are owned by the public.

Pacific Cement Limited is a public unlisted company and former shareholder, South Pacific Cement Limited is a joint venture between Holcim NZ and Fletcher Building Limited.

Fijian Holdings Group chairman, Iowane Naiveli, said: “With this investment, Vinod Patel Group becomes the strategic partner for FHL in the building and construction sector.

“Vinod Patel already owns 49 per cent of Basic Industries, which they acquired in 2013. We are confident this new partnership will contribute in achieving growth and expansion.”

Pacific Cement Limited (previously known as Fiji Industries Limited) is the first cement manufacturer in the country under the brand name, Pacific Cement.

Performance

During the financial year ending June 2014, Pacific Cement Limited exported more than 37 per cent of its production to Pacific cement countries including New Zealand.

It has a capacity to manufacture approximately 200,000 metric tonnes of cement.

Since 1997, Pacific Cement Limited has been a joint venture between FHL and South Pacific Cement Limited, who decided to divest their stake in Pacific Cement in 2010.

FHL waived its pre-emptive rights and as such it was offered to the market.

FHL Group chief executive, Nouzab Fareed, said Vinod Patel was not new to FHL Group.

Fijian Holdings had partnered with Vinod Patel in Clariti South Pacific Limited and as well as in Fiji Sun when it used to be part owned by Fijian Holdings.

“They have contributed positively towards Basic Industries Limited for the past 12 months. With this partnership, Pacific Cement could expand further,” he said.

Handling competition

Meanwhile, Pacific Cement Limited is no longer the only cement manufacturer in Fiji given the opening of Tengy Cement just next to its premises in Lami.

However, Mr Fareed said even though Tengy Cement is a competitor, they collaborate with them as each of them have their own niche market.

“Their cement is priced at a little bit lower than ours. They import clinker from China and we import it from Japan. So there is a difference,” he said.

“Sometimes we share the laboratory facilities. If they need help, we help them. But there are also times when they have assisted us.”

Mr Fareed said they are collaborating because in such a big capital intensive business, the two cannot fight.

He did agree Tengy Cement had taken 15 per cent of the local resident’s market category from Pacific Cement which is basically the bag market.

But, Mr Fareed said there is enough room for both of them to survive.

“Our focus is bulk and exports. Even in bulk, we have not lost anything – last year it was 37,000 tonnes and this year it was 38,000 tonnes,” he said.

“The cement market has grown and there is more room for both companies.”

Feedback:  rachnal@fijisun.com.fj

 

 




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