Displaying items by tag: ACC

India: Shiva Cement is planning to upgrade its cement production capacity to 1Mt/yr with an investment of US$45m. The cement producer currently has a capacity of 0.13Mt/yr at Rourkela in Odisha. The company has an agreement with ACC, who holds a 13% stake in Shiva Cement, to sell its entire production.

"Since we have the requisite land at our existing facility and all the approvals are in place, we expect the project to be completed by the first half 2015," said RP Gupta, chairman and managing director of Shiva Cement. In a second phase the company plans to further increase its capacity to 2Mt/yr.

India: The Indian Supreme Court (SC) today refused to give interim relief to cement manufacturers in their appeal against the interim penalty imposed on them on charges of forming a cartel, confirmed for now by the Competition Appellate Tribunal (CAT). It did, however, delay the deadline for the penalty by over a week.

The CAT had told the companies to pay 10% of the total US$1.1bn penalty imposed by the Competition Commission of India (CCI) by 16 June 2013 and it posted their main appeal for August 2013. The manufacturers appealed against this to the SC. Now the deadline for payment has been moved from Sunday 16 June 2013 until Monday 24 June 2013. However, the court insisted on their complying with the CAT's interim order.

The order was imposed by CCI against 11 major cement producers including ACC, UltraTech and Ambuja and their association. The apex court refused to lift the penalty order or reduce the rate, despite long arguments over two days by senior counsel Abhishek Singhvi for UltraTech Cement and Ranjit Kumar for Jaiprakash Associates. According to the modified order, the amounts shall be deposited with the tribunal and kept in a separate fixed deposit with a nationalised bank. The deposit shall be renewable after six months. The amounts deposited, with interest, shall be dealt with by the tribunal at the time of the disposal of the appeals of the cement companies.

The case was originally filed by the Builders Association of India before the CCI, alleging cartelisation by the cement companies. The director general (investigation) of the CCI found evidence of formation of a cartel by the cement companies, with capacity utilisation held down to control prices. The penalty was calculated on the basis of the annual turnover of the companies in question over a certain period.

India/Germany: ACC has ordered two vertical roller mills from Loesche, in a consortium with KHD, for its Jamul cement plant.

The Holcim subsidiary has ordered a Loesche Mill Type LM 56.3+3 CS equipped with a classifier type LDC to grind clinker. The vertical roller mill will be operated with the power of a 5600kW motor and will have a capacity of 195t/hr. In addition a Loesche vertical roller mill Type LM 43.4 D will be part of the project and is designed to have a capacity of 90t/hr. The gearbox has a capacity of 1300kW.

Loesche's scope of supply for the Jamul project of Holcim will include additional equipment which is delivered in a joint venture by Loesche GmbH, Duesseldorf, as well as by Loesche India Pvt. Ltd.

ACC's sales rose by around 2% year-on-year to US$505.6m as demand improved towards the end of the quarter. The company's earnings before interest, tax, deprecitaion and amortisation (EBITDA) were down to US$59.6m compared to US$83.1m in 2011.

Cost pressures are likely to remain high for ACC due to higher railway freight rates and interest costs. Going ahead, margins may improve on the back of price hike announced recently by cement companies.

India: McNally Bharat Engineering Company Ltd (MBEL), a Williamson Magor group company, has booked an engineering, procurement and construction (EPC) contract worth US$133.5m from ACC Ltd to set up a 9000t/day (~2.9Mt/yr) brownfield cement facility at its existing plant at Jamul, Chhattisgarh. The deal was announced by Deepak Khaitan, chairman of MBEL, at a press conference in the city on 17 December 2012. The plant will be set up with technology from Germany's KHD Humboldt Wedag.

"This order is a major milestone for us as it flags off MBEL's entry into the cement plant construction business," said Khaitan. "This will open up opportunities for MBEL as an EPC contractor for the Indian cement industry."

The company has also opened offices in South Africa to carry out engineering contracts in Africa. "Our emphasis will be to expand our footprint globally," said Khaitan.

India: Villagers living near an ACC Cement plant in Orissa have accused the company of mismanaging its fly ash. According to the villagers living in Khaliapali, crops have been damaged by runoff fly ash created by a captive power plant at the nearby Bargarh cement plant. The resultant slurry has also spilled into the fields of the neighbouring villages of Banjibahali and Baragad.

Khaliapali villagers have accused ACC Cement of taking over 12 acres of land in the village and forcibly dumping fly ash on it despite protests. They said fly ash has become a nuisance in the village as it covers the houses and village water tank rendering water unfit for human use.

Additional District Magistrate Srinibas Kabi commented that the Regional Office of the Odisha State Pollution Control Board (OSPCB) had noted the villagers' concerns. However, OSPCB Regional Officer S S Mishra said they had not received any complaint from the Bargarh administration.

India: Two of Holcim's Indian subsidiaries have reported rises in their second quarter 2012 profits. Ambuja Cement has reported a 35% growth in net profit for the quarter ending 30 June 2012 due to increased sales, to US$84.6m from US$62.8m in the same period of 2011. Net sales by the company rose by 17.9% to US$463m during the quarter from US$392m in 2011. Ambuja Cement attributed this to a 7.3% rise in sales volume, to 5.54Mt from 5.16Mt.

During the quarter, absolute Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the company rose by 22.8% to US$133m. However Ambuja Cement declared that higher operational expenses impacted upon this rise. Total expenses for the company, including raw material and power costs, rose by 15.7% to US$354m from US$306m. The company expects that profit margins are likely to remain under pressure due to steep rise in cost driven by higher raw material prices and rise in distribution and freight costs.

Meanwhile, ACC has reported a 26% rise in consolidated net profit for the second quarter of 2012 due to strong revenue growth, to US$74.8m from US$59.2m in the same period in 2011. Total consolidated turnover for ACC in the quarter rose by 15% to US$526m from US$458m in 2011. The company sold 6.05Mt of cement during the quarter compared to 5.93Mt in the same period in 2011.

Like Ambuja Cement, ACC mentioned 'steep' escalations in most of its key input costs including slag, fly ash, gypsum and power. The company also commented that the increase in railway freight rates with effect from March 2012 substantially impacted both inward and outward costs.

Both Ambuja Cement and ACC were fined in June 2012 by the Competition Commission of India for their alleged involvement in a price-fixing cartel. Ambuja Cement was fined US$210m and ACC was fined US$207m. ACC is currently taking steps to appeal against the fine.

India: Holcim-controlled Associated Cement Companies (ACC) is mulling a US$913m integrated cement complex in the state of Andhra Pradesh. The company is planning a 5Mt/yr integrated cement complex, along with an 8Mt/yr cement grinding unit and a 100MW captive power plant at Gollapalli village in Kadapa district in Andhra Pradesh. To support the cement plant the company is also creating a 7Mt/yr captive limestone mine.

While ACC has made no official comment, industry insiders have expressed surprise that ACC is planning further cement capacity in south India, which is already reeling under excess capacity. ACC has already announced its plans to increase its capacity by 5Mt/yr through brownfield expansion at its Jamul plant in Chattisgarh.

India: In one of the largest fines of its kind, India's antitrust body has imposed a penalty of a combined US$1.1bn on 11 cement companies for price fixing. The companies penalised by the Competition Commission of India (CCI) include ACC and Ambuja Cements (both units of Swiss cement-maker Holcim), UltraTech Cement, Jaiprakash Associates, India Cements, Madras Cements and the local unit of France's Lafarge.

"The commission has found that the cement companies have not utilised the available capacity, so as to reduce supplies and raise prices in times of higher demand," said the CCI in its judgement. It said that the penalty on each company amounted to 50% of their profit for the financial years 2009-10 and 2010-11.

ACC has been fined US$201m and Ambuja has to pay US$204m. India's largest producer of the building material, Ultratech Cement, has to pay US$206m, while Lafarge's Indian unit will have to shell out US$84m. Jaiprakash Associates has been fined US$232m.

On 21 June 2012 the CCI said that the cement companies' action of limiting supplies to the market through an 'anti-competitive agreement' was not only detrimental to consumers but also to the economy, as the building material is a critical input for infrastructure projects. The regulator asked the companies to pay the fine within 90 days. The companies can challenge the regulator's orders in the Competition Appellate Tribunal, a quasi-judicial body and can then appeal to India's Supreme Court.

In response UltraTech said that it hasn't indulged in any cartelisation and that it would appeal against the order in the appellate tribunal. In Zurich Holcim said it would, "contest the allegations and findings against (ACC and Ambuja) in the order and will pursue all available legal steps to defend their respective positions." In Paris Lafarge said, "We will see the detailed report and decide the suitable actions to take. Lafarge has a strict policy to comply with competition laws."

The CCI started accepting cases in 2009, replacing a relatively toothless antitrust body that had been in place since 1970, and has been becoming increasingly assertive. The biggest penalty it had imposed so far was in 2011, when it ordered DLF Ltd., India's biggest property developer by sales, to pay US$120m for abusing its dominant market position by changing agreements signed with some property buyers.

The judgement comes at a bad time for cement companies, as demand for construction materials is weak due to sluggish economic growth and a fall in spending on infrastructure projects. The cost of raw materials such as coal is on the rise as well, pressuring margins.

India: ACC has posted a total income of US$579m for the first quarter of 2012, an increase of 19% compared to the US$488m that it made in the same quarter in 2011.

Operating earnings before interest, taxes, depreciation and amortisation increased by 10%, growing from US$112m in 2011 to US$124m in 2012. Net profit after tax for the quarter fell from US$67.2m in 2011 to US$29.1m in 2012, a decrease of over 55%!

In its consolidated financial results ACC explained that the marked decrease in profit was due to its decision to change its method of providing depreciation on captive power plants from 'Straight Line' to 'Written Down Value' methods at the rates prescribed in Schedule XIV to the Companies Act, 1956. Accordingly, ACC has recognised an additional depreciation charge of US$65.5m. Using the previous method of depreciation profit after tax would have been US$73.6m, a slight increase on the 2011 figure. This change would have had no impact on EBITDA and cash profit for the quarter ended March 2012.

While the company's results benefited from better volumes during the quarter, manufacturing costs and realisations were affected by steep escalations in the cost of inputs such as coal, fly ash and gypsum. The cost of transportation also rose significantly as a result of the hike in rail freight and increase in diesel prices.