Displaying items by tag: India
Zuari plans new Gulbarga plant
02 October 2014India: Zuari Cement has announced that it will set up a 3.2Mt/yr cement plant in Gulbarga through its subsidiary Gulbarga Cement Ltd (GCL). The company also plans to set up 50MW captive power plant. The site for the new plant is 28km from Gulbarga city on the Gulbarga–Bangalore highway.
According to Nabil Francis, Managing Director of Zuari Cement, on completion of the project, the company will have a total capacity of 10Mt/yr and will become one of the largest cement manufacturers in South India. "The capacity expansion will strengthen our presence and strengthen our market expansion plans in the southern, western and the north east markets," he said.
The foundation stone for the plant was laid on 30 September 2014 by Francis along with Ramesh Suryanarayana, Director of Business Development, in the presence of Surendra Pattar, Site Manager, and other senior Zuari Cement executives.
Francis said the Gulbarga unit is designed to double its capacity in the future as part of the plans to cater for growing demand in northern Karnataka and neighbouring Maharashtra.
All the coal board’s men…
01 October 2014Energy costs for cement producers in India are set for volatility following the Supreme Court's decision this week to cancel the vast majority of allocated coal blocks. After ruling that the allocation process by the Indian government was illegal and arbitrary the court stopped 214 out of 218 coal blocks. The affected operators working on the blocks have six months until 31 March 2015 to wind down production. At this point the government intends to auction off the blocks.
The background to this decision lies in the so-called coal allocation scam or 'Coalgate.' Over 80% of coal in India is produced by the state owned company Coal India. Since 1993 though the Indian government has been allocating coal blocks or leases to mine coal for captive use by industries such as cement, steel and power generation.
However, the allocation process was accused of lacking transparency compared to an open bidding process. The Comptroller and Auditor General of India estimated the loss to the government was an incredible US$30bn. The allocation process received further scrutiny as Indian coal imports rose leading to accusations of inefficiency on the Coal India side and corruption on the coal block side. Meanwhile, major power cuts such as those in the summer of 2012 focused both domestic and industrial users' minds on the state of the country's coal industry.
Following the power cuts in 2012, an inter-ministerial panel recommended the de-allocation of two coal blocks held by five companies, including Gujarat Ambuja Cement, Grasim Industries and Lafarge India.
India's coal imports started to increase rapidly around 2009 with an annual growth rate of around 5% and a demand growth of 25% from 2009 – 2014. The majority of its imported coal comes from Indonesia, Australia and South Africa. In 2012 its coal imports were over 150Mt.
With Indian cement producers facing production overcapacity and falling profit margins in recent years, any disruption to input costs such as power is bad news. The growing import rates point to an increasing supply-demand mismatch. A more open process for the allocation of India's vast coal reserves should be good news for industrial users in the medium to long term. However, in the meantime they may face a jolt.
Wonder Cement plans expansion
01 October 2014India: Wonder Cement Limited is planning to expand the capacity of its cement plant at Tehsil Nimbahera in Chittorgarh district of Rajasthan. The company has placed an order with Gebr. Pfeiffer for raw meals and coal mills.
Sagar to acquire BMM Cements
01 October 2014India: Sagar Cements is planning to acquire BMM Cements, which has a 1Mt/yr cement factory and a 25MW captive power plant in Andhra Pradesh. Sagar intends to use the US$70.5m it has raised by selling a 47% stake in France's Vicat for the acquisition.
India: Teja Cement is planning a 3Mt/yr limestone mining project in Kadapa, Andhra Pradesh. The limestone will be used for its integrated cement plant, which will be built in the same location. Environmental clearance has been received. The mining project is expected to commence after completion of the civil works of the cement and clinker projects.
Tamil Nadu government announces 'Amma Cement Scheme'
26 September 2014India: The Tamil Nadu government has announced the 'Amma Cement Scheme,' under which it will procure cement from private manufacturers with the intention of re-selling at a set price in the event of a possible future price increase.
J Jayalalithaa, Tamil Nadu's chief minister, said that she had recently discussed the situation regarding production of cement from the state and supply from outside with officials. Tamil Nadu consumes 1.7 – 1.8Mt/month of cement. Some 400,000 – 450,000t is supplied by Andhra Pradesh, where prices have recently risen substantially. As such, Tamil Nadu has reduced its purchases from Andhra Pradesh to 150,000 – 300,000t/month. However, Tamil Nadu's cement producers have risen their own prices as demand grows.
The Amma Cement Scheme was created in response. The Tamil Nadu government will purchase 200,000t/month of cement from private manufacturers and re-sell it through local distributors. Beneficiaries are eligible for a maximum of 750 bags and the cement could be bought by submitting a government-approved building plan or aroad plan. Those who want to buy cement for repair and renovation are eligible for 10 - 100 bags. Tamil Nadu Cement Corporation will be the nodal agency and the scheme will be implemented by Tamil Nadu Civil Supplies Corporation and Rural Development Department.
JSW Cement to make only Portland slag cement
26 September 2014India: JSW Cement Ltd plans to switch completely to the production of Portland slag cement (PSC), according to its CEO, Anil Kumar Pillai. According to Pillai, slag cement is ideally suited to both infrastructure projects and housing construction.
"We have 6Mt/yr of cement production capacity and will be producing only this variety of cement," said Pillai. The price of PSC is almost the same as the price of ordinary Portland cement. JSW Cement expects a massive increase in demand for slag cement in view of the formation of the new Central Indian government and new governments in some States, with increased focus on infrastructural projects.
"The Andhra Pradesh government has issued an order mandating the use of only Portland slag cement in all government constructions,'' said Pillai. He added that Portland slag cement is very popular outside India, accounting for more than 90% of total cement production in some countries. However, in India, out of total 360Mt/yr cement produced, it accounts for just 7%.
India: On 24 September 2014 India's Supreme Court cancelled all but four of the 218 coal blocks that have been allocated since 1993.
"We are relieved that the uncertainty is over, but now where do the cement and power plants attached to these mines get coal from?" asked Sushil Maroo, a director of Essar Energy and CEO of Essar Power. "What happens to the expenses already incurred? The government needs to give clarity on the modus operandi." The company stands to lose three coal blocks.
"This move will have an extremely negative impact on cement, steel and power companies as an issue that is almost 21 years old is now being addressed," said Issac George, CFO at GVK Power & Infrastructure. "A lot of investments have gone into these blocks, which will now be impacted. Most companies will have no option but to bid in the new round of auctions as one cannot depend on imported coal."
Coal-based projects represent about 59% of India's total installed power generation capacity. Apart from the cancellation, operational mines will have to pay a penalty of US$4.79 for every tonne of coal extracted since they started.
Coal India is set to take over the mines. In 2013 - 2014 Coal India produced 462Mt of coal, missing a target of 482Mt. The coal ministry anticipates that local supplies will fall by as much as 185Mt short of the country's projected demand of 950Mt in 2016 - 2017. The gap could widen if the cancelled mines fail to produce the projected volumes of coal.
The India Cements to demerge Chennai Super Kings into a separate company
25 September 2014India: The India Cements Ltd (ICL) has decided to hive off Chennai Super Kings (CSK), a cricket team owned by it and run as a division of the company, into a wholly-owned subsidiary. Chennai Super Kings is a BCCI (Board of Control for Cricket in India) and IPL (Indian Premier League) Franchise Twenty20 Cricket Tournament Team.
"We propose to de-merge CSK division into a wholly-owned subsidiary of our company,'' said ICL. The de-merger proposal will be taken up for the consideration of the board at its ensuing meeting. CSK has given ICL a new brand image and a pan-India corporate identity.
The iconic stature of M S Dhoni, the skipper of CSK, has helped the company in its forays into news markets such as Rajasthan and Gujarat. Thanks to CSK, ICL has become a household name in India.
Sagar Cements announces acquisition of BMM Cements
25 September 2014India: The board of directors of Sagar Cements Ltd (SCL) has approved the company's move to acquire a 100% stake in BMM Cements Ltd, which owns a 1Mt/yr capacity cement plant and other assets in Andhra Pradesh. The proposed acquisition will take SCL group's total cement capacity to 3.75Mt/yr from the existing capacity of 2.75Mt/yr.
BMM has an enterprise value of US$88.4m, 155Mt of limestone reserves and a 25MW captive power plant. The deal size is currently unknown, although SCL will take over BMM's debt.
"The proposed acquisition of BMM Cements comes at an opportune time wherein the demand environment and pricing in our region of operations looks encouraging," said Srikanth Reddy, executive director of SCL. "The two companies are wholly complementary geographically, with considerable potential for synergies."