Displaying items by tag: UltraTech Cement

Cement producers and suppliers are now reacting to the coronavirus pandemic at scale. The biggest obvious development has been the lockdown in India that began on 24 March 2020. The implications for the cement industry are profound given the country’s population (1.3Bn) and massive cement consumption under normal conditions. It is the country with the world’s second largest cement production capacity.

UltraTech Cement, the biggest producer, said that it was suspending production at ‘various’ locations although it added that the situation was ‘dynamic’ and that it was monitoring it from time to time. Ambuja Cement and JK Lakshmi Cement have done likewise. The latter has suspended cement production at an integrated plant in Rajasthan and three grinding plants in Gujarat. Some Indian states have moved faster than others towards shutting down movement of people so JK Lakshmi’s decision may merely be based on legal necessity. However, a difference may arise in producer strategies between keeping integrated and grinding plants open. Building up inventory is one strategy seen in poor market conditions previously around the world. Alternatively, moving to more of a grinding model might make sense in some territories if, as is happening, countries implement lockdowns at different periods. However, some Indian states have moved faster than others towards shutting down movement of people and JK Lakshmi Cement’s closure pattern may simply reflect this.

At the international scale HeidelbergCement gave an idea to Reuters of the challenge facing the multinationals. Chief executive officer (CEO) Dominik von Achten described the start of 2020 as being strong but that construction projects were being delayed in the US and that activity in France and Spain was starting to weaken. Unsurprisingly, the company has shut down three of its plants in Lombardy at the centre of the Italian epidemic. He added that the group was holding a daily crisis call to assess the effect of the virus upon staff. He also said that the group was stockpiling cement amid the disruption. The clear warning sign was of an existential threat like that faced by the airlines whereby sales could simply stop for a three or four week period… or longer.

On the supplier side, Denmark’s FLSmidth has issued a robust plan on how it is aiming to maintain service and support for its customers. Past all the now-usual stuff such as remote working it included detail on how to support clients on site where absolutely necessary on a case-by-case basis. With regards to its supply chain it pointed out that it was confident, “that any local interruptions to our suppliers can be minimised, even when the agility of some suppliers is put to the test. We have redundancy built into the system.” To this end it emphasised the global nature of its business to ensure that it could deliver parts and equipment to its customers. It claimed that it coped with coronavirus in China due to its ‘very flexible’ supply chain but did admit to some supply chain impacts. Yet it says that production is back to approaching full capacity with workshops in Qingdao and Shanghai above 90% as they work their way through accumulated backlogs. Finally, it is also offering advice on how the company can support its customers on reducing or shutting down operations.

Other supplier comments on the situation have mainly been about protecting staff, working remotely and supporting customers through continued supply of equipment and services. Back in India, Sameer Nagpal, the CEO of refractory manufacturer Dalmia-OCL told Business Standard that the company was coping so far with the crisis with little major impact seen so far. Its raw material supply chain was dependent on China but after some minor disruption it was secure. Most of its customers are domestic, where it hadn’t reported problems so far, although this may change with the Indian lockdown. Exports were a different story as it sends around 10% of its production abroad and it has a plant in Germany. In Europe it was seeing a challenge due to supply chain disruption.

The experiences above are a snapshot of some of what is happening in parts of the industry as coronavirus disruption hits home. China’s restrictions are easing, most of Europe is in lockdown, India has started its quarantine and the US has restricted movement in about a third of its states. The current restrictions in the UK, for example, allow for construction work to continue but local media is debating the associated risks for workers. Other territories have different rules. All of this is affecting demand for cement and concrete. This in turn feeds through to producers and their suppliers. Global Cement continues to monitor the situation and wishes readers a safe passage through the pandemic.

India: Representatives from Aditya Birla subsidiary UltraTech, Ramco Cements, India Cements, JSW Cement and KCP have met with Andhra Pradesh Chief Minister Jaganmohan Reddy and other state officials to negotiate the sale of their products to construction companies working on public projects ‘at lower prices.’ The Hindu newspaper has reported that the state forecasts a year-on-year rise in its annual cement consumption of 67%, to 30Mt in 2020 from 18Mt in 2019. India Cements’ vice chair and managing director Narendra Srinavasan said that all planned infrastructure projects ‘ought to be implemented in order to bail out the industry from the turmoil it has been undergoing.’

India: Aditya Birla subsidiary UltraTech has announced plans for a 3.5Mt/yr clinker production capacity expansion to its integrated Andhra Pradesh plant in Bhogasamudram, Anantapur district, to 10Mt/yr from 6.5Mt/yr. The new kiln line will cost US$169m and reach completion in March 2022.

India: Having announced that it will not participate in bidding for Emami Cement, Shree Cement has announced a planned increase to its production capacity of at least 13.1Mt/yr to 55.0Mt/yr or more by 28 February 2023 from 41.9Mt/yr. It would do this through as yet undisclosed upgrades worth a total of US$1.26bn. The Business Standard newspaper has suggested that the measure is aimed at taking on UltraTech, the expected winner in the auction for Emami Cement’s 5.6Mt/yr-capacity installed assets (under expansion to 8.7Mt/yr).

A source of additional capital for Shree Cement’s planned expansion will be a qualified institutional placement (QIP) through which it has raised US$337m. The company acknowledged that it might reach its target through acquisitions from other producers, for which it would not exceed US$80/t of capacity.

India: The Economic Times has reported a forecasted profit growth for UltraTech Cement of 122% to US$119m over the three months to 31 December 2019 from US$53.6m in the corresponding period of 2018. It explained the boom in terms of increased sales, which may have risen by 7% year-on-year to US$1.50bn from US$1.40bn, and earnings before interest, taxes, depreciation and amortisation (EBITDA) per tonne – up by 45% to US$15.8/t from US$10.9/t. It predicted volumes growth of 3% year-on-year, dragged down by UltraTech subsidiary Century Cement’s falling production.

India: A 20 year old man has been arrested in Nalanda, Bihar for allegedly creating a fake UltraTech Cement website. The individual reportedly took payment for cement and then ceased contact, leaving genuine UltraTech Cement representatives in the state with angry enquiries. UltraTech then reported the site to police.

Police have stated that the arrested man, Rohit Kumar Balram Prasad, has been charged under sections 482 (using false property mark), 483 (counterfeiting a property mark used by another), 419 (cheating by personation) among others of the IPC and the Information Technology Act. They added that further arrests are expected.

India: Integrated cement and grinding plants expansions by companies including Dalmia Bharat, JK Cement and Aditya Birla subsidiary UltraTech of an additional 23Mt/yr are set to bring India’s total installed cement capacity to 508Mt/yr by the end of 2020. Business Standard newspaper has reported that steady prices year-on-year and ‘softening input costs’ have facilitated the expansions in spite of a ‘flattish trend in industry-wide volume growth.’

India: The state government of Maharashtra has granted Aditya Birla Group subsidiary UltraTech Cement environmental clearance for a planned 16MW waste heat recovery (WHR) generator at its 3.6Mt/yr integrated Awarpur plant in Chandrapur district. Projects Today has reported that the state’s Environmental Impact Assessment Authority has also cleared the company’s plan to expand its Korpana coal-fired power plant in Chandrapur to 15MW from 10MW. The producer will place orders for construction contracts in February 2020.

India: Emami Group has indicated that it will receive bids for its cement division Emami Cement from mid-January 2020. Business Standard newspaper has reported that Aditya Birla’s UltraTech Cement is likely to submit an offer in the region of US$0.94bn for the company – over 20% lower than Emami Group’s previously projected evaluation of US$1.18bn for Emami Cement. It also reported the possible involvement of Switzerland-based LafargeHolcim’s Ambuja Cements in the upcoming auction.

India: Germany’s Gebr. Pfeiffer has won a supply contract with UltraTech for one MVR 6000 C-6. The mill can grind up to 370t/hr of mixed cements or 225t/hr of granulated blast furnace slag (GBFS). Gebr. Pfeiffer has stated that it is the 17th mill of its type in India. The company will assist its subsidiary Gebr. Pfeiffer (India) Pvt. Ltd. in commissioning the mill in early 2021.