
Displaying items by tag: Ramco Cement
Ramco Cement inaugurates grinding plant in Odisha
14 October 2020India: Naveen Patnaik, the chief minister of Odisha, has attended the inauguration of Ramco Cement’s new cement grinding plant at Haridaspur. The unit had a cost of just under US$100m and has created 105 direct jobs. A LM 46.2+2 CS type vertical roller mill with a capacity of 3750kW has ordered from Germany-based Loesche in 2018 for the project. The cement producer says that the plant is designed to be ‘totally dust free,’ including bag filters designed to ensure emission levels below 30mg/m3.
Ramco Cements commissions 9MW waste heat recovery power plant at Jayanthipuram cement plant
14 September 2020India: Ramco Cements has commissioned a 9MW waste heat recovery (WHR) power plant at its 3.7Mt/yr Jayanthipuram, Andhra Pradesh cement plant. Chief executive officer (CEO) Av Dharmakrishnan said, “Besides savings in power cost, the installation of WHR systems in our plants will also reduce CO2 emissions substantially, which will have a positive impact on the environment.”
BusinessLine Online News has reported that Ramco Cements is currently building a 12MW WHR power plant at its upcoming Kolumigundla, Andhra Pradesh cement plant. When the plant becomes operational it, will bring the company’s total WHR power generation capacity to 39MW.
Ramco Cement increases Lynks Logistics stake to 69%
07 September 2020India: Ramco Cement has increased its stake in Lynks Logistics to 69% following its acquisition of a 23% stake in the company for US$273,000. The group previously invested US$700 in a 46% stake on 27 January 2020.
Update on India, April 2020
08 April 2020As India reaches two weeks into its 21 day lockdown to combat coronavirus, the financial analysts are starting to publish their forecasts as to what the effects will be for the cement industry. The results are gloomy, with demand predicted to drop by up to 25% in the financial year to March 2021 by one analyst and 40% in March 2020 alone by another.
Graph 1: Indian cement production, rolling annual by month, January 2018 – February 2020. Source: Indian Ministry of Commerce & Industry.
The graph above sets the scene for what may be to come by showing the state of production in India in recent years. From early 2018 it picked up by 17% to 337Mt by March 2019 and stayed around there through the rest of year before breeching 340Mt in January and February 2020. The (relative) lull in production growth in 2019 was blamed by some analysts on the general election in mid-2019 and then the monsoon rains. In summary the market was improving and seemed set for further growth in 2020. Alas, this does not now seem to be the case.
Looking ahead, Rating’s agency CRISIL has published a research paper on the topic and here are some of the highlights. They break the damage down into two separate scenarios. The first, where the social distancing measures last until the end of April, cause a 10 – 15% fall in cement demand with the pain limited to the first quarter of the Indian financial year, which starts on 1 April. The second, where distancing measures last until June, cause a 20 – 25% decrease in demand, with the problems extended into the second quarter. Salient points that it makes about the anticipated recovery include a delay in infrastructure spending due to the government diverting funds to healthcare, reduced private and real estate markets and a divide between state-led affordable housing schemes in urban and rural areas. It pins its hopes on rural housing to grab demand first, followed by key infrastructure projects, especially transport schemes.
Examining the cement producers directly, CRISIL reckons that prices will fall in the face of dropping demand but that power, fuel and freight costs are all expected to fall also. Profit margins are forecast to drop compared to the 2019 – 2020 financial year but still remain higher than the two previous ones. Finally, it looked at the credit profiles of 23 companies, representing over 70% of installed production capacity. Together they had a total debt of US$7bn. It flagged up four of these companies as having high debt/earnings ratios and five with low interest coverage. The latter were described as ‘small regional firms with weak cash balances.’
That’s one view on what may happen but two recent general industry news stories offer snapshots on what may be to come for the Indian market. The first is an immediate consequence of a nationwide lockdown in a country with a population of 1.3bn and a low cost of labour. 400 construction workers at a grinding plant build for Ramco Cements in Haridaspur, Odisha, were stranded at the site when the quarantine restrictions stopped them travelling home to Bihar, Jharkhand and West Bengal. They took up residence at the building site and then protested when the food ran out. This point about migrant labour is noteworthy because how the Indian government relaxes the lockdown could have massive consequences upon how the construction industry recovers. A possible parallel from elsewhere in the world is the slowdown effect the Saudi Arabian cement industry suffered in late 2013 when the government took action against illegal foreign workers in the construction industry.
The second news story to keep in mind is the annual results from refractory manufacturer RHI Magnesita this week. It reported growing revenue from its cement and lime customers in 2019 but it blamed a weaker market in Europe on producers stockpiling product due to tightening magnesite and dolomite raw material availability. The takeaway here is that if supply chains supporting the cement sector and the rest of the construction industry in India at the moment are affected by the coronavirus outbreak, and government action to stop it, then there may be consequences later on. So far Global Cement hasn’t seen anything like this but the preparation for coronavirus advice from industry expert John Kilne has been to indentify and secure medium term needs, including refractory and critical spare parts and to consider potential disruption to supply chains.
In terms of what happens next once the lockdown ends in India (and other countries), one media commentator has described the response to coronavrius as the ‘hammer and the dance.’ The hammer is the economy-busting measures many governments have implemented to stop local epidemics. The dance is/are the measures that countries are using before and after an outbreak to keep it suppressed until a vaccine is developed. The worry for building material producers is how much the ‘dance’ disrupts business over the next year. All eyes will be on the East Asian producer market figures for the first quarter to see how this plays out.
India: Construction workers employed at the site of Ramco Cement’s Haridaspur, Odisha, grinding plant, which has been under construction since early 2018, have protested over an alleged lack of food being supplied to the plant, where they are currently residing. The Pioneer newspaper has reported that the nationwide coronavirus lockdown prevented the 400 workers, from Bihar, Jharkhand and West Bengal, from returning home, leading them to take up residence in the Haridaspur plant. Police are talking with the protestors and Ramco Cements management.
Ramco Cements invests in 46% of Lynks Logistics
27 January 2020India: Ramco Group subsidiary Ramco Cements has invested US$0.7m in a 46% share in Lynks Logistics. The company will serve the 17Mt/yr-installed capacity producer’s logistics and distribution needs for all of India.
India: Ramco Cements’ Ramasamy Raja Nagar integrated plant has won the ‘Green Award 2018 for Industries of Tamil Nadu’ from the Tamil Nadu Pollution Control Board. It was bestowed in recognition of the contribution towards protection of environment made by the company. Special focus is acknowledged to best practices adopted to achieve best environmental quality in emissions, discharge of waste water, solid and hazardous waste management and green belt development.
India: The Central Pollution Control Board (CPCB) has issued a show cause notice to Ramco Cement’s Ariyalur plant in Tamil Nadu for breaching air pollution limits. CPCB inspectors found that the particulate matter (PM) and NOx emissions were higher than allowed during an inspection in March 2019, according to the New Indian Express newspaper. The CPCB has recommended that the unit supplies continuous data transmissions and calibrates of all of its monitors to CPCB Online Continuous Emission Monitoring Systems guidelines.
Ramco Cements’ earnings hit by input costs
30 January 2019India: Ramco Cements’ earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 14% to US$102m in the nine months of 31 December 2018 from US$119m in the same period in 2017. Its revenue rose by 15% to US$510m from US$445m. Sales volumes of cement increased by 19% to 7.83Mt from 6.58Mt. The cement producer said that sales had increased in southern and eastern markets. It blamed its falling earnings on rising diesel price that negatively affected transport costs for both raw and finished materials.
Ramco Cements to build new 3.15Mt/yr plant in Andhra Pradesh
14 December 2018India: Chandrababu Naidu, the chief minister of Andhra Pradesh, has laid the foundation stone for Ramco Cements’ new 3.15Mt/yr integrated plant at Kalavatala, Kolimigundla Mandal in Kurnool District. The project has an investment of nearly US$210m. The plant will include a waste heat recovery (WHR) unit and a captive power plant. A 25km railway line from Samjamala has also been proposed to support the plant. Once the required statuary clearances are obtained the plant is expected to take 15 months to build.
Other new projects the cement producer has scheduled include an upgrade at its Jayanthipuram plant in Krishna District to 4.6Mt/yr from 3.1Mt/yr with a 27MW WHR unit. The project has a cost of just over US$100m and it is expected to be commissioned in March 2020. The company is also upgrading the grinding capacity of its Vizag plant to 2Mt/yr from 0.9Mt/yr. This project has an investment of around US$25m and is also expected to be commissioned in March 2020. Once these three projects are completed Ramco Cements says that it will become the largest producer in Andhra Pradesh with a production capacity of nearly 10Mt/yr.
In the east of the country Ramco Cements us building a new 0.9Mt/yr grinding plant in Odisha with a railway terminal for around US$70. This is expected to be commissioned by September 2019. In West Bengal the company is upgrading the grinding capacity at its Kolaghat plant in East Midnapore district to 2Mt/yr from 0.9Mt/yr for around US$60m. This project also includes a railway terminal and it is scheduled for commissioning in April 2019. Altogether the company plans to reach a cement production capacity of 20Mt/yr by 2020 across the country.