After investing around Rs2,500 crore to create new capacity, industrial gas maker Linde India Ltd is looking to consolidate its assets in the country with the aim of shoring up returns as the economy starts to look up, key officials said at the company’s annual general meeting in Kolkata on Monday.
Between 2007 and 2013, the company has invested to scale up its India operations, but the “priority at this point of time is to make sure that we make them deliver”, said Moloy Banerjee, Linde’s managing director.
The company had expected a return on capital employed (ROCE) of 15%. “But we are clearly not there,” Banerjee said, adding that the last two years were “challenging”. The ROCE in 2017 was 7%, according to Banerjee.
Asked about the company’s proposed global merger with Praxair Inc., Sanjiv Lamba, chairman of Linde India, said the competition watchdog’s view on the matter isn’t immediately clear. It isn’t known immediately which assets, if any at all, the Competition Commission of India will ask Linde to divest, he added.
There are some 500 competitors in the industrial gas market in India, and four big multi-national players, including Linde and Praxair, jointly control 50% market share, according to Lamba.
Source: Mint