Birla Corp.'s Net Declines

Birla Corp's Net Profit Dips By 43 %

Birla Corporation has posted its September 2015 quarter results as under.
Birla Corp's net profit stood at Rs 18.48 crore from Rs 32.46 crore for the corresponding period a year ago, a decrease of 43 %.
Birla Corp's net sales stood at Rs 801.78 crore from Rs 767.11 crore for the corresponding period a year ago.
Birla Corp's cement sales volume stood at 19.59 lakh tonnes from 19.12 lakh tonnes for the corresponding period a year ago.

Birla Corporation Limited, is the Kolkota-based flagship company of the M P Birla group of companies. The Cement Division of Birla Corporation Limited has seven plants, two each at Satna (M.P.) - Satna Cement Works & Birla Vikas Cement, Chanderia (Rajasthan) - Birla Cement Works & Chanderia Cement Works, Durgapur (W.B.) - Durgapur Cement Works & Durga Hitech Cement - and one at Raebareli (U.P.)-Raebareli Cement Works. The total installed cement capacity of Birla Corp. is 9.3 MPTA.

India Cements Excels

India Cements Posts A Whopping 5-Fold Increase In Net Profit For Q2

India Cements has reported a net profit of ₹41.04 crore for the quarter ended September 30, as against ₹7.49 crore for the corresponding period last year.
Total income was ₹1,082.37 crore for the quarter ended September 30, as against ₹1,135.85 crore for the corresponding period last year.
Net Plant Realisation was ₹3,887 per tonne for the quarter ended September 30, as against ₹3,506 per tonne for the corresponding period last year.
Total Sales Volume was 2.16 million tonne for the quarter ended September 30, as against 2.35 million tonne for the corresponding period last year.

Power and Fuel Costs were ₹220.20 crore for the quarter ended September 30, as against ₹265.13 crore for the corresponding period last year.
Finance Costs were ₹89.39 crore for the quarter ended September 30, as against ₹100.67 crore for the corresponding period last year.

Plant Capacity was at 60% utilisation for the quarter under review.
Clinker exports were also lower for the quarter under review.

India Cements has a total installed cement capacity of 15.5 MPTA. The company's annual turn-over is around ₹52.31 Billion. The company has 10 plants scattered across the country, though the bulk of it's operations are in South India.

Grasim Industries Limited

Aditya Birla Group's Grasim Industries Posts Good Q2 Results

Grasim Industries Limited, a group firm of the Aditya Birla Group posted its Q2 results. Grasim Industries is involved in the manufacture of Viscose Staple Fibre (VSF), which is used in garments, cement, and chemicals. Grasim's cement subsidiary is UltraTech Cement.

GIL reported a net profit of Rs.488.50 crore, as against Rs.416.38 crore for the corresponding period a year ago, an increase of 17 %.
GIL reported a consolidated income of Rs.8,392.90 crore, as against Rs.7,943.05 crore for the corresponding period a year ago, an increase of 6 %.
GIL reported a consolidated Ebitda (earnings before interest, tax, depreciation and amortization) of Rs.1,485 crore, as against Rs.1,277 crore for the corresponding period a year ago, an increase of 16 %.
GIL reported a stand-alone net profit of Rs.338.24 crore, as against Rs.299.41 crore for the corresponding period a year ago, an increase of 13 %.

Grasim's cement subsidiary UltraTech Cement reported a 4 % growth in cement revenues and cement sales volume was also higher at 11.4 MT against 10.9 MT last year. With the commissioning of cement grinding units of 1.6 MTPA each in the states of Haryana and West Bengal, the company's cement capacity now stands at a massive 67.7 MTPA.

Kochi Cement Hub

Kochi to emerge as a major cement hub in South India

In addition to the two cement companies currently operating in Kochi port, Ambuja Cements and UltraTech Cement, Zuari Cement is expected to begin operations in November 2015. Civil construction activities for Penna Cement's terminal has begun. The Kerala state owned Malabar Cements is all set to begin their ambitious cement terminal.

Cement throughtput figures for Kochi port are:
Cement throughput was 2,59,000 tonnes during 2010-11.
Cement throughput was 3,11,000 tonnes during 2012-13.
Cement throughput was 6,04,000 tonnes during 2013-14.
Cement throughput was 7,03,000 tonnes during 2014-15.

Info on Kochi Cement Hub here...

Orient Cement Q2 Results

Orient Cement Net Profits Dips by 35% For Q2

Orient Cement, part of the US$1.6 Billion CK Birla group reported for the September quarter a 35% drop in its net profit on account of lower income and higher expenses and finance costs.

The cement company has registered a net profit of Rs 28.01 crores as against Rs.43.33 crore for the corresponding quarter in the last fiscal. Its net sales declined to Rs 355.04 crore in the September quarter of the current fiscal as against Rs 384.12 crore in the same quarter of the last fiscal. Total expenditure of the company rose to Rs 331.09 crore during the September quarter as against Rs 318.06 crore in the same quarter of the last fiscal. Finance cost of the company during the September quarter increased to about Rs 5 crore as against about Rs 4 crore in the same quarter of the last fiscal.

Orient Cement has an installed cement capacity of 5 MPTA. As part of its long-term growth plan to reach 15 MTPA cement capacity by year 2020, Orient Cement is setting up a facility of three MTPA at Chittapur, Gulbarga, Karnataka at an investment of about Rs 2,000 crore.

Sanghi Cement

Alok Sanghi, Director, Sanghi Industries Speaks On Cement Growth Drivers

Alok Sanghi, Director, Sanghi Industries Limited, expressed his views on the key factors that drive cement growth. He goes on to say that adding to the product line by way of Blended Cement (Pozzolana Portland Cement) in addition to the conventional OPC (Ordinary Portland Cement) acts as a cement growth driver. By taking a fresh look at Logistics adding coastal shipping, cement markets that were conventionally not cost-effective have now become major potential markets.

Read more on cement growth drivers...

Orient Cement's Cement Capacity Addition

Orient Cement Commissions New Greenfieeld Integrated Cement Plant.

Orient Cement Ltd has commissioned, started commercial production and cement dispatches at its new greenfield integrated cement plant located at Chittapur, Gulbarga District, Karnataka with an installed cement capacity of 3.0 million tonnes per annum (MTPA).

With the commissioning of this new unit, the total installed capacity of Orient Cement Ltd. has increased to 8 MTPA from 5 MPTA. Orient Cement's other cement units include, Cement Plant unit at Devapur, Adilabad, Telangana and Split Cement Grinding unit at Jalgaon, Maharashtra.

Orient Cement is part of the CK Birla Group, a growing US$1.6 billion conglomerate that has interests in three industry clusters: technology and automotive, home and building, and healthcare and education.

Low Carbon Cement Developed

Limestone Calcinated Clay Cement (LC3)

India with an installed cement capacity of 289 MTPA, is poised to grow by leaps and bounds as the country embarks on a $1 trillion infrastructure development plan. With this in mind, Indian and Swiss researchers have developed LC3, a low carbon cement.

Karen Scrivener, Full Professor, Construction Material Laboratory at Ecole Polytechique Federale De Lausan (EPFL), a leading technology institute in Switzerland has stated that Limestone Calcinated Clay Cement (LC3) can help reduce CO2 emissions by about 30 per cent and is made using limestone and low-grade clays. It is also cost-effective and does not require intensive modifications to existing plants to adapt to production of the new type of cement. She goes on to say that concrete is responsible for 5-10 per cent of man-made CO2 emissions. But this is remarkably low considering that it makes up about 50 per cent of everything we produce. It is the only material which can satisfy the growing demand for construction.

India specific, she says that the demand for cement is increasing hugely in the fast- growing Indian economy and it is imperative that the growth is synergised with ecologically sustainable material and technology. She notes that the Indian government has said there is immediate potential for investments totalling $1 trillion to build infrastructure. It also has plans for 100 smart cities to give a fillip to urbanisation.

The research partners in the project funded by Swiss Agency for Development and Cooperation, include IIT Delhi, IIT Madras, IIT Bombay and Delhi-based Technology and Action for Rural Development.

Cement Industry Outlook For Q2

Cement Companies To Perform Better in September 2015 Quarter

With the recent hikes in retail cement prices in the north cement markets, and the continued good retail prices elsewhere, particularly in the south, cement companies are expected to put up a better show in the coming Q2 results though cement industry analysts, expect sales growth in the three months ending September to also remain subdued because of the monsoon season.

Some other aspects to be considered while arriving at better projections for the September quarter are that, while raw material costs as a percentage of net sales remained stable at around 17.8%, power and fuel costs were the lowest in around five years because of a decline in overall prices of cement industry consumables pet coke and coal. Moreover, with prices of key raw materials such as crude dropping sharply, margin recovery will be seen in the September quarter.

Recent Cement M&A May Delay

Recent Cement Mergers & Acquisitions May Go On Hold

The new Mining Act that has a clause that bars the transfer of mines that were not allotted via auctions. Prior to this new act, hundreds of mines had been allocated for captive use by industries in the past. However, under the new act, when these businesses change hands via mergers and acquisitions, it could be an issue if the captive mines linked to production capacities are not transferable as most of the M&A take place with the intent of transfer of the associated mining and mineral rights.

In the amended Mines & Minerals (Development & Regulation) Act 2015, Sub Section 6 of Sec 12A says that only mines which have been allocated through auctions can be transferred. "The transfer of mineral concessions shall be allowed only for concessions which are granted through auctions". But it is unclear if it covers historically allocated mines given via nominations or only ones in future. This ambiguity in the law makes it open to different interpretations. The core question here is "Does the new rules apply prospectively or retrospectively?".

This confusion directly impacts 2 major cement industry M&A of recent days. One, the takeover of Jaypee Group's cement plants in MP by KM Birla's Ultratech Cement which has been stuck for months on this issue. Two, the recent deal by Lafarge-Birla Corp. in which Birla Corp. part of the MP Birla Group is to take over 2 of Lafarge India's cement units.

Read more on Cement Mining and Mineral Rights here...

Cement Acquisition Business

Birla Corp. To Accquire Lafarge India's 2 Cement Units

Birla Corp. has announced that it has come into an agreement with Lafarge India Private Limited (Lafarge India), wherein Birla  Corp, either directly or through its wholly owned subsidiary, will acquire both the Jojobera and Sonadih cement businesses from Lafarge India for a value of Rs. 5,000 crores.

Under this transaction, in addition to the cement units, Concreto and PSC brands and an excellent management team are part of the deal. The tranaction has a cement capacity of around 5 million tonnes per annum (mtpa), with mineral rights over  adequate reserves of limestone.

Birla Corp, part of the MP Birla Group has presence across cement and jute industries among others. Cement constitutes over 90% of the company's revenues with a total operational cement capacity of 8.79 mtpa.

The Cement Division of Birla Corporation Limited has seven plants, two each at Satna (M.P.) - Satna Cement Works & Birla Vikas Cement, Chanderia (Rajasthan) - Birla Cement Works & Chanderia Cement Works, Durgapur (W.B.) - Durgapur Cement Works & Durga Hitech Cement - and one at Raebareli (U.P.)-Raebareli Cement Works it has units in Rajasthan, Madhya Pradesh, Uttar Pradesh and West Bengal.

Post completion of the transaction, Birla Corp will have a total capacity of approx.14 mtpa.

Cement Business Acquisition

Cement Companies Offer 33% Wage Hike

Cement Manufactures Finalise 33% Increase In Wages

Cement Manufacturers’ Association, India (CMA), the one and only employers’representative association for the cement industry, has finalized plans to grant all workers under it's representative cement companies a 33% hike in salary, under a new wage accord. A settlement to this effect has been arrived at with the National Federation of Trade Unions (INTUC, BMS, AITUC, HMS, CITU and LPF), representing cement company workers across India.

The new wage settlement will be valid for a period of four years, covering the period from April 2014 to March 2018.

Cement company workers thus benefitted are employed by 20 companies having 85 cement units across the country, which, covers approx. 66 per cent (189 million tonnes) of the total annual cement production capacity in India (285 million tonnes of cement).

The settlement, effective from April 1, 2014, envisages an increase of Rs 6,000 per month in the gross pay of cement company workers (to be paid in two installments of Rs 3,000 each in April 2014 and September 2016), which converts to an enhancement of 33% in their salary. It also provides for increased dearness allowance benefits. The arrears for 16 months will be paid in two instalments, said cement industry spokepersons in Chennai.

Cement Manufacturers’ Association has been representing the employers in wage negotiations since 1978. After the two Arbitration Awards in 1978 and 1982, the cement industry has been signing 12 (3) settlements under the Industrial Disputes Act, 1947 at the conclusion of bilateral negotiations with the National Federation of Trade Unions (comprising INTUC, BMS, AITUC, HMS, CITU and LPF), representing cement workers across India. Together with the current settlement effective April1, 2014, there have been 7 such national-level settlements for the cement company workers from 1989 onwards.

The current settlement was reached between CMA and representatives of trade unions before chief labour commissioner P P Mitra in New Delhi. Those present at the meeting were:
N Srinivasan, Vice-Chairman and MD, India Cements,
O P Puranmalka, President of CMA,
S Chouksey, Vice-President of CMA,
N A Viswanathan, Secretary-General of CMA,
and representatives of the trade unions.

N. Srinivasan, Vice-Chairman and MD of The India Cements Ltd.,Chennai said ...“The current settlement is unique in today’s scenario since it is perhaps the only nation-wide settlement reached for workers of a major organised industry in the private sector. Despite the difficult conditions being faced by the industry, due to subdued demand and lower capacity utilisation, it has agreed to implement the wage revision in the overall interest of a large number of workers.”

N. Srinivasan, Vice-Chairman and MD of The India Cements Ltd.,Chennai, has been taking the lead in the negotiations on behalf of Cement Manufacturers’ Association for the past 25 years having concluded six out of seven settlements signed so far.

Read more in detail in the below referred links...

Cement Wage Settlement

Cement Company Wages

CMA Wage Settlement

Cement Manufacturers Wage Settlement

Cement Demand To Improve

Cement Demand to Grow by 7% in FY16

Rating agency ICRA has stated that they envisage the Indian cement industry to show a cement demand growth of 7% for the FY16. Currentlt the capacity utilization of the cement industry is around 72%. The report projects a cement capacity utilization of 77%.

Recovery in infrastructure, investment cycle, overall economy, better than expected monsoons, a stable central government, and optimistic econmic outlook are the key factors that lead to the projected cement demand figures.

Sabyasachi Majumdar, senior vice president, ICRA outlines the key factors of poor demand for cement in FY15 and Q1 of FY16.

Read more articles on cement demand growth here.


Cement Demand

Cement Industry Growth

Dalmia Cements Ultra Cement Launched

Dalmia Cements Launches Ultra Cement in Kolapur

Dalmia cements plans to launch the sales of their premium brand Ultra Cement in Kolhapur, Maharastra with the help of 170 cement retailers they have appointed.

Dalmia Cements projects a cement market potential of 1 Lac Million tonnes by the end of the year 2020 and keeping this in mind plan to capture a cement market share of 5% to 6% in the coming 2 to 3 years.

Maharastra is an important cement market with 10% to 12 % of the total Indian cement market. The projected cement sales growth rate is estimated to be in the region of 3% to 4%.

Read in greater detail on Kolhapur and Maharastra Cement Markets and on Dalmia Cements' Ultra Cement Brand Launch.

ACC Cement Net Profit Drops 45%

ACC Cement Profit Dips

ACC Cement in its quarterly report reveals a downward movement in its net profit of Rs.133.5 crores, 45% over the corresponding period  last year. Last years figures stood at a healthy Rs.243.2 crores.

ACC Cement in its statement attributed subdued cement demand and challenging cement market conditions for its poor showing.

The report goes on further to state that higher competition in the cement markets due to surplus cement production capacities lead to cement prices being volatile.

Poor investment in infrastructure and housing lead to weak demand for cement, while overall construction activities remained dull and lacklustre.

ACC Cement

ACC Cement Sales

ACC Cement Sales Performance

ACC Cement Markets 

Sanghi Cements To Double Cement Capacity

Sanghi Industries To Increase Cement Capacity

Gujarat based Sanghi Cements is all set to increase their installed cement capacity from the current 4.1 MT to 8.1 MT over the next three to four years. Sanghi Cements had just recently with the installation of their new 1.2 MT cement grinding unit increased their installed cement capacity from 2.9 MT to 4.1 MT.

Mr.Alok Sanghi, Director has recently outlined his plans for the cement company to take it into being a major player. Sanghi Cements has a good cement marketing presence in Gujarat, Rajastan, Maharastra and now Kerala.

The total financial outlay to achieve this cement capacity will be to the tune of Rs.1200-1500 crores.

More on

Alok Sanghi

Sanghi Cements

Sanghi Cement Capacity Expansion

Holcim CEO Steps Down

Bernard Terver as Head of India for LafargeHolcim

With the sucessful completion of the Holcim-Lafarge merger, Bernard Fontana will step down as CEO of Holcim Ltd.

Closer home, Bernard Terver currently serving as Head for Africa-Middle and South Asia will assume charge as Head of India for LafargeHolcim. In this capacity he is also to continue to serve on the boards of ACC Cement and Ambuja Cements.

More on this topic in detail here... LafargeHolcim India

800 Cement Retailers to Market Cement

Dalmia Cements

Dalmia cements has launched their premium brand Dalmia Ultra in the Maharastra cement markets. The company has engaged 800 cement retailers to help with the product launch of this cement brand.

The cement that feeds the Maharastra cement markets are from their new greenfield cement factory in Belgaum district in Karnataka. The Rs.1300-crore plant spread over 380 acres, has a total capacity of 2.5 million tonne per annum (mtpa) and will cater to the needs of the customers in Maharashtra and Karnataka markets.

More on...

800 Cement Retailers

Dalmia Cements and Maharastra Cement Markets

Cement Market Share

Dalmia Ultra Cement

Outsourcing Cement

Outsourcing a Cement Plant

Jammu and Kashmir Cements Limited a (Jammu & Kashmir Government Undertaking), a 600 TPD Cement Plant situated in the village Khrew, District Pulwama, some 25 Kms away from Srinagar is fast turning into a loss making venture.

The state government is giving serious thought on outsourcing the once-profitable public sector undertaking.

Read in greater detail here ...Cement Plant Outsourcing 

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Saurashtra Cement Sale

Saurashtra Cement Sale

Mauritius Debt Management has sold its 0.65% share in the Mehta Group's Saurashtra Cement for a total transfer value of Rs.1.34 crore.

More on Saurashtra Cement Sale

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Institutional Demand for Cement Poor

Cement Retail Sales

A special report on the cement industry's retail cement sales as well as cement institutional sales paints a very dismal picture for the North India cement markets and cement sales. FY15 was to be a recovery year for cement sales but poor institutional of-ftake coupled with low purchasing power from rural markets has changed the scenario.

Low subsidies and poor rainfall has left its mark on rural cement spending. And infrastructure and other government projects are yet to take-off.

North India consumes around 79 Million tonnes of cement or around 33% of India's cement consumption.

The special report goes on to say that a growth of 3% - 4% is projected but that too depends on substantial infrastructure off-take.

More on Institutional Cement Sales

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2 Million Tonne Cement Sales

2 Million Tonne Cement Sales

Cement companies with units based in Andhra Pradesh are smiling as the Andhra Pradesh government has finalised plans to lift 2 million tonnes of cement from cement units with factories based in Andhra Pradesh for its social development projects and infrastructure. A major share will be for irrigation projects.

India Cements, Ramco Cements, Dalmia Cements, My Home Cements and Bharathi Cements as well as a number of smaller cement units will benefit from this exercise.

Andhra Pradesh has 22 cement plants with a total  installed capacity of 53 million tonnes of cement. The actual production for the year 2014-2015 was only 27 million tonnes that is just half the installed capacity.

Andhra Pradesh government officials are quoted as saying that the state will need 2.2 million tonnes of cement for the year 2015-2016.

More details here Cement Sales


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Cement Prices and Weak Demand

Cement Prices and Weak Demand

North India cements markets are the hardest hit with a 11% drop in cement prices. West India and East India cement markets are slightly better off with South Indian cement markets holding the cement price lines.

Cement experts say that this is due to a number of factors. Reasons may differ from market to market but some for all are applicable to cement markets all over India.

# Unseasonal summer rains have subdued rural markets.
# Payments due to contractors being delayed.
# Government infra projects bidded on but yet to take-off.
# Real estate markets are still subdued.

Read more from the experts here on Cement Prices

Cement Demand Expected To Pick Up

Cement Markets

The cement industry is looking to a good monsoon this year to help pickup cement demand from rural markets. This will in turn help cement price recovery and on a longer term see good times for cement markets. North Indian and West India  cement markets may see pressure on cement prices. South Indian and East Indian cement markets seem to be better markets where the cement price lines are holding.

Infrastructure activities will act as a catalyst for future improvement in cement prices all over the Indian cement markets.

Read more on trends in the Cements Markets

Cement Market Consolidation

Cement Market Consolidation

Major French Cement player Lafarge is all set to accquire a 14% stake in Lafarge India. The deal worth around $304 million will depend upon Larfarge's merger with Holcim. With this the Indian subsidiary will become a 100% ownership one. Baring Private Equity now holds this 14% stake.

Read more on Cement Consolidation

Cement Marketing

Dalmia Cement is all set to expand its cement marketing base in Sri Lanka. This major cement player with an capacity of 20 MTPA has plans to expand its cement marketing volumes in Sri Lanka. Dalmia is a prominent presence in the South Indian and Eastern Indian cement markets.

More on Cement Marketing