Displaying items by tag: Ramco Cement

India: Ramco Cements plans to commission a new 2.5Mt/yr clinker production line at its new plant near Kurnool, Andhra Pradesh in February 2022. A 1Mt/yr grinding unit, 12MW waste heat recovery system and 18MW captive power unit at the plant are expected to be commissioned in the 2022 – 2023 financial year, which starts in April 2022.

The cement producer also intends to commission at upgrade to its Nagar cement plant in the 2023 – 2024 financial year. The US$63m project includes installing a new 300t/day kiln at the plant in Tamil Nadu.

India: The 5th National Conclave on Mines and Minerals has granted its Five Star mine management award to two Ramco Cements limestone mines. These are the Melavenkateswarapuram mine and Pudupalayam and Periyangalur mine in Tamil Nadu. This is the fourth successive year that the company has won a Five Star award for its mining operations in the state.

India: Ramco Cements has commissioned a new waste heat recovery (WHR) unit on Line 3 of its Jayanthipuram cement plant in Andhra Pradesh. The company said that the system consists of two boilers and that the first on the line’s cooler has been started. A second boiler situated at the line’s preheater will be commissioned in June 2022. The new installation increases the Jayanthipuram plant’s WHR capacity by 31% to 21MW.

India: The state government of Orissa has approved cement grinding plant projects proposed by My Home Industries and Ramco Cements. My Home Industries plans to build a new 3Mt/yr grinding plant at Badchana in Jajpur. The Orissa Diary newspaper has reported the value of the producer’s planned investment as US$89.0m. Ramco Cements has proposed a 0.9Mt/yr at Haridaspur in Jajpur. The unit will cost US$26.0m and employ 60 local people.

Dalmia Bharat managing director Puneet Dalmia characterised India’s cement industry as one of ‘many regions and many players’ in an interview on 10 August 2021. It is equally an industry of many plants – which are seemingly larger and more numerous by the week.

On 9 August 2021, Orient Cement announced an investment of US$215m to increase its Devapur, Telangana, cement plant’s capacity by 53% to 11.5Mt/yr from 7.5Mt/yr. Another Southeast Indian producer, Ramco Cements, plans to invest a total of US$135m in upgrades in the 2022 financial year; it completed US$53.9m (40%) of the planned investments in the first quarter alone. NCL Industries is planning a US$13.5m expansion of its 2.7Mt/yr Mattapalli, Telangana, cement plant by 33% to 3.6Mt/yr and the establishment of a new 0.66Mt/yr grinding plant at nearby Anakapalle for US$26.9m by 2022. Thus, a single state has at least 5.56Mt/yr-worth of new capacity in the pipeline with US$337m-worth of pending investments. If the central government grants the Telangana government’s 6 August 2021 request to reopen Cement Corporation of India’s Adilabad cement plant in the state, this will be joined by a further 4.0Mt/yr of ‘old’ capacity.

Nationally, investments in on-going cement plant projects total US$1.81bn. What is remarkable here is the continued drive to expand despite existing overcapacity. Puneet Dalmia estimates that Indian capacity utilisation will be 70% in 2021. Despite this, his company plans to increase its installed capacity by 17% to 36.0Mt/yr in the (current) 2022 financial year and by 57% to 48.5Mt/yr with the realisation of all on-going projects by the 2024 financial year, from 30.8Mt in August 2021. By 2030, the group aims to more than triple its installed capacity to over 110Mt/yr. Dalmia says that, if it is to achieve this, it will be not as another South and East Indian regional company, but a ‘pan-India, pure play cement producer.’

Dalmia’s confidence is founded on the belief that overcapacity will abate. His assurance is more than just that of an investor: when, in July 2021, the Department for Promotion of Industry and Internal Trade established an advisory body, the Cement Industry Development Council (CIDC), to help tackle the oversupply issue, it appointed him as chair. Puneet Dalmia predicts that capacity utilisation will rise to 85% ‘within a few years’. Consolidation is key: over the same hazily defined time period, the top five producers’ 57% share of the cement market will rise to 65%, he believes. Rising fuel costs and restrictive limestone mining licencing will deter would-be cement plant start-ups; anticipated carbon costs should clear away a lot of old wood.

Demand is the other half of the coin in India’s attempt to pitch market forces against overcapacity. In the first quarter of the 2022 financial year, cement demand fell by an estimated 20% amid the Covid-19-led collapse of rural housing’s bagged cement uptake. This type of sales roughly accounts for a third of Indian cement consumption. Other construction segments have proved more resilient. Prime Minister Narendra Modi’s government, never infrastructure-shy, chose to resume national projects after India’s Covid-19 lockdown ended on 10 May 2020, keeping them running through subsequent waves of the pandemic. The National Highways Authority of India (NHAI) continued with 480 projects covering 25,000km of road. In Andhra Pradesh, the state government is building 122,000 new homes. Cement producers have been able to corner pent-up demand to shift their stock at a generous margin.

The Confederation of Real Estate Developers' Associations of India (CREDAI) claimed on 9 August 2021 that the price of cement is hampering the realisation of affordable housing targets, and lobbied the government to reduce the goods and services tax on cement to 18% from 28%. In parts of the country, state governments have taken the matter into their own hands. The Kerala government set out to take over 25% of the Keralan cement industry on 5 July 2021. Its plan: increasing cement production, a policy which it is already implementing via state-owned Malabar Cements and Travancore Cements.

Puneet Dalmia claimed on 10 August 2021 that India’s per-capita cement demand is 200kg/yr, corresponding to a total national demand of 276Mt/yr and 60% below the purported global average of 500kg/yr. Given India’s development trajectory, growth is nearly inevitable. Puneet Dalmia is unequivocal in his medium-term prediction: Indian cement revenues will rise at a rate of 9–10% per annum, outstripping forecast gross domestic product (GDP) growth by 2%.

Indian cement’s tale of rebound and growth is borne out in the latest financial reports. UltraTech Cement’s first-quarter sales in the 2021 financial year were US$1.59bn, up by 54% year-on-year from US$1.03bn in the first quarter of the 2020 financial year. Its cement sales rose by 47% in the period to 21.5Mt from 14.6Mt. In its 2021 first-half report, Ambuja Cements recorded year-on-year sales growth of 41%, to US$930m from US$659m, and cement sales growth of 36% to 13.5Mt from 9.95Mt. This is echoed both in the other Indian producers’ reports and internationally: France-based Vicat named India alongside its home country as an area of particular sales growth in the first half of 2021, especially in the second quarter.

The UN Intergovernmental Panel on Climate Change’s demonstration of the impacts of human activity on the climate in a report published on 9 August 2021 might lead an observer to ask “What’s the good?” in all this growth. In the face of the immense benefits cement offers to the lives of Indians, a more pertinent question would be “How best can growth happen?” Ambuja Cement’s aforementioned plan to grind clinker with fly ash is a step in the right direction. Another is Vedanta Aluminium’s proposed fly ash and bauxite residue supply deal, for which it is seeking a cement industry partner. The new Cement Industry Development Council’s remit extends to the coordination of the sector’s efforts towards maximising efficiency and eliminating waste. ACC and Ambuja Cements are participating in parent company Holcim’s Plants of Tomorrow programme, which aims to increase the efficiency of cement production through better plant optimisation, higher plant availability and a safer working environment. Dalmia Bharat has a goal of net zero CO2 cement production by 2040, and a plan for getting there.

Pan-Indian producers are on the rise. Big companies desperate to modernise and implement their models of sustainable growth are blazing a trail. The size gains will be a national marvel - if the promises of sustainability are realised. What will be lost is the Indian cement industry’s festival of local and regional producers. Though still an industry of many regions and many players, its regions are increasingly close together, its players increasingly few.

India: Ramco Cements plans to invest US$80.8m in future upgrades to its cement plants before 30 March 2022. In the first quarter of the 2022 financial year, which begun on 1 April 2021, the company invested US$53.9m in upgrades. The Hindustan Times newspaper has reported that realisation of its spending plan would bring the producer’s total upgrade investments for the 2022 financial year to US$135m.

India: Ramco Cements recorded standalone net sales of US$166m in the first quarter of the 2022 financial year, up by 17% year-on-year from US$141m in the corresponding quarter of the 2021 financial year. Its earnings before interest, taxation depreciation and amortisation (EBITDA) rose by 37% to US$49.7m from US$36.3m. The company’s net profit growth for the quarter was 54%, taking this to US$22.7m from US$14.8m.

Chief executive officer Aahvan Dharmakrishnan said “With lot of uncertainties and commodity prices going up without corrections, we were able to control the cost reasonably well and performed well.”

India: Ramco Cements plans to invest US$64m in a modernisation and capacity expansion of its Ramasay Raja Nagar cement plant in Tamil Nadu. The Hindu newspaper has reported that the project involves building a new 3000t/day clinker line to replace a 1450t/day line. This will increase the plant’s overall capacity by 32% to 1.44Mt/yr from 1.09Mt/yr. The company has placed equipment orders for the project and plans to commissions the upgrade in December 2022. It expects to receive environmental clearance for the work in September 2021.

India: Cement producers reduced the proportion of coal in their fuel mixes during the fourth quarter of the local 2021 financial year. Ramco Cements’ petcoke use was 41% in the 2021 financial year compared to 48% in the 2020 financial year, according to Mint News. Dalmia Bharat subsidiary Dalmia Cement used 52% petcoke in its cement fuel in the fourth quarter of the 2021 financial year, which ended on 31 March 2021, compared to 70% in the year’s third quarter. In the same comparison periods, Aditya Birla subsidiary UltraTech Cement reduced its petcoke share to 30% from 77%. It replaced the fuel with 60% coal, compared to 10% in the third quarter of the 2021 financial year.

Petcoke prices more than doubled year-on-year to US$130/t in the fourth quarter of the 2021 financial year, leading cement producers to switch fuels. Coal prices have resultantly risen by 82% to US$100/t. Producers rely on imports for both commodities.

India: Ramco Cements reported consolidated net sales of US$731m in its 2021 financial year, down by 2% year-on-year from US$745m in its 2020 financial year. Cement sales volumes fell by 11% to 9.98Mt from 11.2Mt. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 34% to US$218m from US$162m. The company said that cement markets had shrunk in the south due the coronavirus pandemic but they grew in the east. It added that it was complying with state government mandated public health lockdowns, which were introduced in May 2021, on a regional basis.