Displaying items by tag: Birla

India: Birla Corporation has overcome sand supply issues to see its sales and cement volumes rise in its financial year to the end of March 2018. The group overcame a restriction on sand mining in Uttar Pradesh and Bihar in the first nine months of the year, according to the United News of India. Its sales revenue grew by 19% year-on-year to US$878m from US$736m. Its cement sales volumes rose by 23% to 12.4Mt from 10Mt. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 14% to US$128m from US$113m.

India: M P Birla Cement has launched its new so-called premium brand ‘Perfect Plus’ from its Maihar plant in Madhya Pradesh and its Chanderia plant in Rajasthan. The product uses deflocculated fine particles of cement to form a Calcium-Silicate-Hydrate (C-S-H) gel that improves the quality of the concrete made from it. Reported advantages for concrete made from the product include high early strength, reduce permeability and better water demand to reduce voids and increase strength.

India: Birla Corporation plans to launch its Perfect cement product across most of the country, except in the south. The brand was purchased by the cement producer in August 2016 when it acquired Reliance Cement, according to the Business Standard newspaper. The product launch is Birla’s first national rollout. Perfect brand cement is produced at the former Reliance Maihar plant in Madhya Pradesh. The cement producer is also planning to introduce a new variant of its Unique brand of premium cement, which will be sold in the northern region. This brand of slag cement is limited to its eastern market and is currently manufactured from the Durgapur plant in West Bengal.

India: Birla Corporation has declared its results for the quarter and nine months that ended on 31 December 2017. The consolidated results include the financials of Reliance Cement Company Private Limited (RCCPL), a wholly-owned material subsidiary of the Company.

The corporation made 3.06Mt in the third quarter, a 22% rise compared to the same period of 2016-2017. In the nine months to 31 December 2017 it produced 9.1Mt of cement, a 11.9% increase year-on-year. It despatched 3.04Mt of cement compared to 2.49Mt in the quarter and 8.98Mt in the nine month period, a 12% rise year-on-year.

In financial terms it took in US$215m in gross sales during the quarter, a 12.7% rise year-on-year. In the nine month period it took in US$667m, a 27.8% rise. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the three months were US$23.6m and for the nine months they were US$93.0m.

Last week we promised reasons to be cheerful for the cement industry. We only have one to offer this week but it's a good one. At present three Indian cement companies are on sale: Lafarge India, Reliance Cements and Jaiprakash Associates. If these sales complete then it represents an opportunity for the Indian cement industry to reorganise itself and stride forward when growth recovers.

Lafarge India upped its sales proposal to the Competition Commission of India (CCI) on 6 January 2016 to sell its entire 11Mt/yr portfolio. Originally as part of the LafargeHolcim merger agreements the CCI asked Lafarge to sell 5.2Mt/yr of production capacity in Chhattisgarh and Jharkhand in eastern India. However the deal was reliant on the original buyer, Birla Corporation, securing limestone mining rights. Birla failed to do so. Now Lafarge India has decided to sell everything instead. Naturally, following its Euro8bn spending spree in 2015 CRH has been linked to the sale by Indian media.

Then following press speculation Reliance Infrastructure confirmed to the Bombay Stock Exchange on 11 January 2016 that it was at an 'advanced stage of discussions with potential buyers for divesting the cement business of the company.' Reliance's cement arm, Reliance Cement, holds three cement plants in Maihar in Madhya Pradesh, Kundanganj in Uttar Pradesh and Butibori in Maharashtra with a total production capacity of 5.8Mt/yr. In addition to this, the company is also developing a 5Mt/yr cement plant at Wani in Maharashtra. The Reliance sale has been reported upon since early 2015. The difference this time is that Reliance responded to local press reports that it was about to sell to Birla Corporation or a couple of other private equity firms.

Finally, the third sale concerns Jaiprakash Associates' on-going attempts to sell its remaining cement assets to service its debts. Jaiprakash Associates cement subsidiary, Jaypee Cement, holds eight plants in India with a cement production capacity of 11Mt/yr. In addition it holds six cement grinding plants with a capacity of 10.7Mt/yr. Despite reported attempts to sell the entire division in one Jaypee has actually ended up selling its cement assets in a piecemeal fashion one or two at a time. The most recent sale being announced this week is to sell its Bhilai Jaypee Cement to Shree Cement. This follows other sales to HeidelbergCement and UltraTech in 2015.

None of these sales are new exactly but the combined production capacity of these plants comes to just under 28Mt/yr. This represents 9% of India's total national cement production capacity of 310Mt/yr. Any player somehow able to weasel their way into striking a deal for all of these plants would immediately become one of the country's biggest producers.

It would definitely be a case of buyer beware though. Credit agency ICRA recently reported that it expects that cement demand growth will be a 'modest' 4% in the 2015 - 2016 financial year before picking up in the following year. This follows poor growth in cement demand in the first half of 2015 and even declines in March and April 2015. ICRA also expected the country capacity utilisation to drop to 70% in the 2016 financial year, down from 77% in the 2012 financial year. That 7% drop in the utilisation is awfully close to the 9% of Indian national production capacity that the cement assets currently on sale from Lafarge India, Reliance Cement and Jaypee Cement. Unsurprisingly, the buyers of Indian cement assets have been picking and choosing their plants one-by-one so far.

India: Birla Corporation has promoted BR Nahar to the managing director of the company. The decision was made at the board of directors meeting held on 28 July 2012. Nahar, a Fellow Member of the Institute of Chartered Accountants of India, holds more than 33 years professional experience. He became Birla's executive director and chief executive officer in 2006. He has served in diverse fields at senior positions in various large corporate houses.