Displaying items by tag: India

India: ACC has reported a 40.8% drop in its consolidated net profit to US$37.9m for the quarter that ended on 31 March 2015 owing to slack demand in the domestic market. It had posted net profit of US$64.1m during the same period of 2014.

"With slack demand for cement from infrastructure and the general construction sector in the January - March quarter, the overall cement sales volumes registered a decline compared with the corresponding period of 2014," said the company in a statement. "The overall operating costs for cement business registered an increase of 3.6% year-on-year."

The company's total consolidated turnover for the quarter saw a 2.75% decline to US$462m compared with US$475m in the same period of 2014. Sales volumes declined to 5.82Mt as against 6.48Mt in 2014. Its total income from operations increased by 1.75% year-on-year to US$493m. Earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 18.3% to US$79.7m. "EBITDA for the quarter reflects continued margin improvements," said ACC's statement. During the quarter, ACC also received US$22.4m as an incentive from the Jharkhand government following a high court order, which helped push up its EBITDA.

ACC is hopeful that cement demand will improve in the next two quarters and said that its focus will continue to be on performance. "We see a modest but steady revival for the Indian economy in 2015. This will have a positive impact on infrastructure, housing and construction sectors and will increase the demand for cement," said ACC chairman NS Sekhsaria. The company is now looking forward to commission its clinker plant and allied grinding plant at its Jamul plant in Durg, Chhattisgarh by the end of 2015.

India/China: China's Sinoma International Engineering Co Ltd is keen to invest in cement and wind energy projects in Andhra Pradesh. Song Shoushan, Sinoma's chairman, told the delegation that it sees India as a potential market for the cement industry and that Sinoma sees Andhra Pradesh as a potential state for their biggest manufacturing facility in India.

India: The Mumbai Port Trust has allocated allotted 25,000m² of land at Petroleum Godown to UltraTech Cement for 30 years, from which cement can be shipped in from other states and distributed to users across the city, according to trust chairman and managing director Ravi Parmar.

The land will be used to build a fully-automated cement handling terminal devoid of air pollution. In 18 months, when the terminal will be completed, it will engage in the transport of cement required for Mumbai's consumption via the coastal route. The estimated cost of the development of the facility, duly equipped with portable unloaders, 30,000t silos, bagging facilities and other ancillary facilities is about US$16.1m.

Mumbai city consumes approximately 1.25Mt/yr of cement. Currently, this cement is moved by road and rail through neighbouring states, necessitating the entry and exit of nearly 350 trucks per day, congesting the already strained city roads.

The news this week that construction companies in the Indian state of Telengana are considering cement imports from China in order to circumvent a local dispute over cement prices highlights several issues. Firstly, state politics in India can create some interesting and not altogether logical situations. Secondly, it throws the spotlight on the changing situation in China, where the cement industry will be increasingly squeezed from all sides in the coming years. Thirdly, it shows that the global cement industry is exactly that – Global.

The first reaction when hearing of Chinese imports into India might reasonably be one of shock. How can it be that it is cheaper (21% less by local estimates) to import cement from 5500km away, into the world's second-largest cement producer, than it is to send it down the road from Andhra Pradesh? Overall, India is 'swimming in' excess cement capacity, which should make it cheap across the board. Large, well-run and efficient plants, coupled to current low diesel (transport) prices, should give the industry significant advantages on the international stage. So what's going on?

Poor local and national infrastructure is the 'obvious' culprit here, but it is only part of the story. The Telengana state government has imposed extra taxes on trucks bringing cement into the state from neighbouring Andhra Pradesh. By suggesting imports from China, it is possible that the Real Estate Developers' Associations of India (CREDAI) wants to make a point to the state government. Spotting a local imbalance of cement supply and demand, Telengana appears, in this instance, to have acted to make a quick buck. However, it has done so to the detriment of many other stakeholders. The extra tax deprives cement producers of higher sales, robs hauliers of business and stops the public getting a fair market price for cement. This highlights that India has not only physical infrastructure to build (in terms of highways and new railways), but also a more effective political infrastructure that can put aside state-on-state one-upmanship. This is a long-term task and not straightforward when you consider India's 1.25 billion inhabitants.

Of course the fact that China has been mentioned by CREDAI as a likely source of cement is far less surprising. The largest cement producer in the world has had excess capacity for several years now (regardless of who is supplying the statistics) and takes the opportunity to export whenever it can.

However, the sands are shifting under China at the moment. The country has not been able to rely on domestic demand to keep its over-inflated cement industry in business for many years now. It is indeed highly questionable whether it ever needed a cement industry the size of the one that it built.

Indeed, economic growth is slowing for the economy as a whole and this week there were even calls for the national housing bank to reduce interest rates for lower and middle income earners, effectively propping the sector up. This comes on top of tax breaks for home-buyers, which came in at the end of March 2015. Falling house prices have bred uncertainty and a lack of demand for new constructions and hence cement. Could China's absurd cement demand bubble finally be about to pop?

Whether or not the bubble pops next week or in a couple of years, the government has long been making preparations, in the cement sector at least. It has started to aggressively remove older and inefficient capacity, encourage cement exports and helped finance new plants overseas. China is changing its emphasis from cement production to cement plant project management. This is a good move, especially as there will be fewer opportunities for conventional exports in the coming years. Neighbouring Vietnam expects to have an incredible 20Mt of cement for export at less than US$50/t in 2015, flooding China's traditional sphere of influence. At the same time, the number of countries that are self-sufficient in terms of cement production are on the rise, meaning fewer importers.

Even opportunities for Chinese firms to build cement plants outside China are likely to become fewer and further between in the future. The most promising markets in Africa already have Chinese cement plants or cement plant projects, joined this week by Zambia. Chinese cement and cement engineering firms also have interests in Central Asia, Nepal, Mongolia and elsewhere. These markets, while promising, will have nothing like the potential to consume cement like China did in the recent past. As China reduces its capacity, its growing cement plant engineering sector may well find it hard to do enough business to survive...

India: The Confederation of Real Estate Developers' Associations of India (CREDAI) has said that it plans to import cement from abroad, particularly China, in order to overcome the rising prices faced by builders and the Telangana government's decision to impose extra costs on trucks coming from the neighbouring state of Andhra Pradesh.

With trucks owners deciding to suspend their operations in protest at the move, there have been reports of cement shortages. "The cost of premium cement in the retail market is set to increase steeply, as transportation costs will shoot up with the government's decision to impose road tax on trucks from Andhra Pradesh," said CREDAI Vijayawada chapter president C Sudhakar. "To avoid this, there are plans to import cement from China."

Sudhakar estimated that the cost of importing Chinese cement could be 20 – 21% lower than getting it from Andhra Pradesh, a clear benefit to CREDAI members and local homeowners.

India: Lafarge and Holcim have received clearance from the Competition Commission of India (CCI) for their proposed merger.

A package of asset divestments has been agreed with the CCI which includes Lafarge's Sonadih cement plant and its Jojobera grinding station, with a total of approximately 5Mt/yr of production capacity, in Eastern India. LafargeHolcim will have a cement capacity of around 68Mt/yr in India.

The divestment process will be carried out in the framework of the relevant social processes and ongoing dialogue with the employee representatives' bodies. The divestment process will be completed subject to the closing of the merger between Lafarge and Holcim.

India: Vaishno Cement Company Ltd has appointed Sarita Agarwal as an independent non-executive director with effect from 27 March 2015.

India: Dalmia Cement (Bharat) has commenced trial production at its 2.5Mt/yr greenfield cement plant in Karnataka. When commissioned, the plant will take the group's capacity to 24Mt/yr. "Dalmia Cement, a subsidiary of Dalmia Bharat Ltd, has commenced trial production at its new cement plant in Belgaum, Karnataka on 23 March 2015," said Dalmia Cement in a statement.

India: Penna Cement Industries plans to set up a 700,000t/yr capacity grinding plant in Daund, Pune, Maharashtra. The plant will be set up on 93,077m² of land and is estimated to cost US$31.9m. Gannon Dunkerley Co will be the contractor and Walchandnagar Industries will be machinery supplier.

India: Koshal Cement has abandoned a 45,000t/yr mini grinding plant in Nagaon, Bargarh, Odisha. The plant was intended to produce 50% Portland pozzolana cement (PPC) and 50% Portland slag cement (PSC) using a ball mill.