Displaying items by tag: HeidelbergCement India

India: HeidelbergCement India has commissioned a 5.5MW solar power plant in its mining area located in Damoh, Madhya Pradesh. The mining operations and clinker plant at Damoh have started receiving electricity from the plant. The solar plant is expected to generate 10GWh/yr, replacing electricity purchased from the grid.

India: In its results for the third quarter of the 2022 financial year, HeidelbergCement India has recorded a sales decline of 9.5% year-on-year to US$71.7m from US$79.2m. Its net profit for the quarter was US$4.07m, down by 52% from US$8.51m.

India: HeidelbergCement India’s results in the second quarter of the 2022 financial year showed an 11% year-on-year rise in sales to US$76.1m from US$68.5m in the corresponding quarter of the 2021 financial year. Dion News Service has reported that the company’s net profit for the quarter was US$7.96m, down by 4.6% from US$8.34m. Its operating costs were US$61.5m, up by 19% from US$51.8m.

India: HeidelbergCement India has appointed Ramakrishnan Ramamurthy as its chairman following the resignation of Akila Krishnakumar. Krishnakumar said she wanted to increase her work in the development sector. Ramamurthy started his career with Bosch (India) as an apprentice and worked with Murugappa Group for around twenty years. More recently he was the managing director of GMR Group, the president of Mytrah Energy and the chief executive officer of Sanmar Engineering.

India: Germany-based HeidelbergCement subsidiary HeidelbergCement India has secured 22GWh-worth of power from Lalganj Power. The energy company will source the electricity from its solar power plants. The deal is expected to reduce the company’s CO₂ emissions by 0.4Mt over the life of the contract.

India: HeidelbergCement India’s net profit in the six months to 30 September 2020 – the first half of its 2021 financial year – was US$15.1m, down by 19% year-on-year from US$18.6m in the first half of the 2020 financial year. Its revenues fell by 17% to US$125m from US$151m.

The company attributed the fall to the impacts of the on-going coronavirus outbreak. It said, “The company is taking all possible steps to mitigate the effects of Covid-19 on its business and operations. The management has also evaluated the possible impact of the pandemic on the business operation and, based on its assessment of the current indicators of the future economic conditions, it is expected that the carrying amount of assets will be recovered.”

India: HeidelbergCement has recorded a profit of US$8.77m in the three months to 31 March 2020, up by 8.9% year-on-year from US$8.06m over the corresponding period of the 2018 - 2019 fiscal year. Sales fell by 4.7% to US$67.5m from US$70.8m. HeidelbergCement India has attributed the profit to a decrease in operating expenditure of 8.6%, to US$50.7m from US$55.4m, according to Dion News Service.

India: Germany-based HeidelbergCement has announced the successful expansion of two grinding plants. Accord Fintech News has reported that the company took advantage of the suspension of cement production since 24 March 2020 to complete debottlenecking work at the Jhansi, Uttar Pradesh, and Imlai, Madhya Pradesh, grinding plants, bringing their cement production capacities to 3.3Mt/yr and 2.5Mt/yr respectively.

HeidelbergCement India has an integrated capacity of 3.7Mt/yr and a grinding capacity of 6.3Mt/yr (total capacity: 10Mt/yr).

India: HeidelbergCement India’s revenue grew by 4% year-on-year to US$221m in the nine months to 31 December 2019 from US$232m in the same period in 2018. Its sales volumes fell by 1.9% to 1.22Mt from 1.29Mt. Its net profit rose by 26% to US$22.4m from US$28.3m. The subsidiary of Germany’s HeidelbergCement said that, despite a fall in revenue in the quarter to 31 December 2019, a decrease in petcoke prices and an increase in power generation from waste heat recovery systems, had helped to keep costs under control.

The cement producer added that de-bottlenecking work at its grinding mills at Imlai in Madhya Pradesh and Jhansi in Uttar Pradesh is expected to be completed by the end of March 2020. Following completion of the project the company’s total cement grinding capacity will be 6.26Mt/yr.

The National Council for Cement and Building Materials (NCB) International Seminar is running this week in New Delhi and this gives us a good opportunity to take a snapshot at the world’s second largest cement industry.

Data from the Ministry of Commerce & Industry shows comfortable cement production growth of 4.4% year-on-year to 255Mt in the first nine months of 2019. As graph 1 shows there was higher production growth in 2018 but this followed a decline in 2017, due to partly to the government’s demonetisation policy. October 2019 confirms a trend of falling year-on-year growth from August 2019 onwards following a peak growth rate in mid-2017.

Graph 1: Indian cement production in the first nine months of the year, 2015 – 2019. Source: Indian Ministry of Commerce & Industry.

Graph 2: Year-on-year change in monthly Indian cement production, 2017 – October 2019. Source: Indian Ministry of Commerce & Industry.

Analysts like ICRA have blamed the growth slowdown on the general election in mid-2019 and then the monsoon rains. By region in the six months from April to September 2019 it noted a slowdown in demand due to slowing government projects in northern, eastern and central areas. Labour concerns were reported in the north, centre and Gujarat in the west. Raw material shortages were picked up on such as water in Maharashtra and sand in the east and Andhra Pradesh. Positive growth was reported in Kerala, driven by post-flood reconstruction and low-cost housing schemes, and in Karnataka due to general construction activity. Broadly, UltraTech Cement, the country’s largest cement producer, in its November 2019 investor’s presentation, agreed with this assessment. It noted growth in the northern region and declines elsewhere. Like ICRA it too picked up on low cost housing declaring it to be a ‘key cement consumption driver.’

Away from the figures the main news stories have been continued consolidation such as the auction for Emami Cement and UltraTech Cement’s acquisition of Century Textiles and Industries. The sale of the former for plants in east and central regions has been linked to all the major local producers, including those owned by LafargeHolcim and HeidelbergCement. A report in the Hindu newspaper last week quoted a source placing UltraTech Cement and Nirma Group as the frontrunners with a valuation of around US$700m and an announcement at some point in December 2019. Despite UltraTech Cement’s market dominance nationally, its 17% production share in the east is low compared to its presence elsewhere. Nirma Group’s subsidiary Nuvoco Vistas is one of the smaller producers but, notably, it picked up Lafarge India’s assets in 2016.

Investment in new production capacity has continued with announcements from both JSW Cement and HeidelbergCement in recent weeks about expansion plans well into the mid-2020s. This follows planned projects from Dalmia Bharat Cement and Ramco Cement as well as orders from the JK Cement and Shree Cement. This ties into the capacity growth forecasts of around 120Mt over a similar timescale that the analysts were predicting in the middle of 2019. JM Financial, for example, pinned most of this growth on the south followed by the east and north. However, The India Cements said in November 2019 that it was delaying its expansion projects in Uttar Pradesh due to slowing government spending.

As is usual for a country with a low per capita cement consumption, on the national scale, one of the tensions in the Indian cement industry has been the balance between the capacity utilisation rate and the commissioning of new capacity. Its utilisation rate was below 60% in 2018 and a number of producers started reporting the negative effects of higher input and raw materials costs on their financial results. Knowing when to stop and start capacity growth is critical in this kind of environment. Specifically in India’s case curveballs such as government action on pollution and the country’s growing need for imports of coal as well as a burgeoning waste fuels sector are factors to keep an eye on. Finally, general trends such as UltraTech Cement’s focus on the Indian market, despite buying assets outside the country, are also compelling to watch as it chooses to concentrate on just one country. There are parallels here with other similarly-sized multinational that have also been focusing on core markets elsewhere in the globe.