Displaying items by tag: India Cements

India: The India Cements will pay each of its 500 cement plant workers an additional US$736/yr, effective retroactively from the start of the 2023 Indian financial year on 1 April 2022. This will subsequently rise by up to another US$736/yr from the start of the 2026 financial year. The Hindu BusinessLine News has reported that the move is the result of talks with workers' unions. The India Cements additionally agreed to pay a total US$202,000/yr in premiums on medical insurance policies for all cement plant employees.

The India Cements operates 10 cement facilities in India.

India: India Cements Limited has posted a loss of US$16.9m during the quarter that ended on 30 September 2022 on account of increases in fuel and coal costs. The manufacturer had earlier reported a profit of US$9.3m in the three months to 30 June 2022. India Cements’ vice chair and managing director, N Srinivasan, “It was a difficult quarter because the coal price increase was quite sharp.”

India: India Cements has agreed to sell Springway Mining to JSW Cement for US$57.9m. Springway Mining is currently building an integrated cement plant in Damoh, Madhya Pradesh, with dedicated limestone reserves in nearby Panna.

India Cements has received US$45.4m-worth of its payment for the business, and expect to receive the outstanding US$12.5m by 31 December 2022.

India: JSW Cement is 'closing in' on an acquisition of some of India Cements' assets in Madhya Pradesh and Rajasthan. The Business Standard newspaper has reported that JSW Cement beat an offer by UltraTech Cement for the Rajasthan assets.

India Cements began construction of a new 3Mt/yr cement plant with a dedicated limestone mine in Madhya Pradesh in 2022. In May 2022, it announced that it was contemplating a land sale in order to reduce its debt. India Cements ended the 2022 financial year with debt of US$369m, up by 1.4% year-on-year from US$364m at the close of the 2021 financial year.

India: UltraTech Cement and India Cements are reportedly poised to conclude a deal for the acquisition of the latter’s 185ha Pawai limestone mine in Panna, Madhya Pradesh, by Mumbai-based UltraTech Cement. Marketline News has reported that the Aditya Birla subsidiary expects to pay US$98m for the asset.

Fuels procurement and costs have been weighing on the minds of Indian cement producers since the start of the Russian invasion of Ukraine in February 2022. Two news stories this week show some of this. The first concerns recent imports of petcoke from Venezuela. The second covers the closure of captive power plants due to domestic shortages of coal.

At the same time, as the financial results for cement companies for the first quarter of the Indian 2023 financial year have been released, one constant has been hefty hikes in power and fuel costs. Graph 1 below gives a rough idea of the jump in costs major producers have been contending with. One point to note is that, possibly, the larger cement companies may have been better at slowing down the cost inflation from fuel. However, the prevalence of waste heat recovery installations and alternative fuels usage may also be a factor here. Finally, the company approved to buy Ambuja Cement and ACC, Adani Group, also runs India’s biggest coal trader. It will be interesting to see in the medium term how this might affect the fuel costs for its new cement division.

Graph 1: Comparison of Power & Fuel costs for selected Indian cement producers in first quarter of 2022 and 2023 financial years. Source: Company financial reports.

The Venezuelan story demonstrates the greater lengths that Indian cement producers are now going to secure fuel supplies. Reuters reports that cement companies imported at least 160,000t of petcoke from the South American country between April and June 2022 and that more was on the way. JSW Cement, Ramco Cements and Orient Cement are among them. The Venezuelan oil industry has been under US economic sanctions since 2019 but byproducts such as petcoke are not covered by this. Its petcoke has apparently been discounted by 5 - 10% below the price of US alternatives.

Indian cement producers have been prepared to risk US sanctions further by importing coal from Russia. The Business Standard newspaper, using data from Coalmint, reported that Russia became India’s third largest source of coal imports, at 2.06Mt, in July 2022. Before the war it was the sixth-largest source of coal to the country. Again, Reuters covered how cement companies were doing this in July 2022, when it revealed that UltraTech Cement had used India-based HDFC Bank to purchase coal using Chinese Renminbi, not the US Dollar as is more common for international purchases of commodities. In a conference call for the release of its first quarter results, UltraTech Cement’s chief financial officer Atul Daga confirmed the purchase and described it as “opportunistic.” He added that, “If something more surfaces, we will pick it up.” As the data for July 2022 shows, it may or may not be UltraTech Cement that is buying Russian coal right now but other parties in India certainly are.

Some of the wider economic implications about India buying Russian coal in the face of US and European sanctions include whether any retaliation might be forthcoming and a general sign that the dominance of the US Dollar as the world’s reserve currency is not guaranteed. The former seems doubtful given the size of India’s markets. Yet if the sanctions against Russia drag on then a shift in the global economic status quo becomes more likely, especially if opportunistic purchases become regular ones.

The situation facing captive power plants illustrates one more turn of the screw on energy costs for industrial manufacturers. 30% of captive power plants in India are reportedly closed due to the high cost of coal or an inability to even import it. Although it is worth noting that it is unclear whether, proportionally, more or less of these are serving cement plants. As N Srinivasan, the vice-chairman and managing director of India Cements told the Business Standard newspaper, “Most of our plants have coal based captive power generation. The cost of captive generation is now more than the grid cost. Hence, we shut down all captive power units and resorted to grid power.”

The International Energy Agency (IEA) forecast in July 2022 that Indian coal demand would grow by 3% year-on-year to 1.16Bnt in 2023 due to expanded electrification and economic growth. In its view, global coal demand will be driven principally by China but also by India to a lesser extent. However, unhelpfully, it added that uncertainty was also rising with ongoing developments in the war in Ukraine having a prominent effect. This is unlikely to assist Indian cement producers and their fuel buyers who will be asking themselves: how long will the current situation last and can the prices be passed on to consumers? There is one small silver lining in the current group of economic storm clouds hanging over cement producers at least. The second quarter of the Indian financial year is monsoon season, when economic activity slows down. It won’t slow the trend down but it may reduce the fuel bill a little.

India: India Cements’ fourth-quarter sales were US$183m in its 2022 financial year, which ended on 31 March 2022, down by 4% year-on-year from US$190m in the corresponding quarter of the 2021 Indian financial year. The producer’s net loss was US$1.37m, as against a first-quarter 2021 financial year net profit of US$6.47m. During the quarter, the company’s cement sales volumes fell by 1.4% to 2.63Mt from 2.67Mt, while its clinker sales volumes fell by 88% to 38,000t from 324,000t. For the full 2022 financial year, India Cements’ sales of cement rose by 2% to 9.07Mt from 8.9Mt. Coal costs ended the financial year at US$300/t, five times the 31 March 2021 price of US$60/t.

India Cements said “The spiralling prices of fuel, along with the shortage in availability of the same, affected the margins of the industry. The woes of the industry worsened further with the outbreak of Russia's war with Ukraine resulting in sanctions being imposed on Russia and its exports, fuelling further shortage of coal and oil in the market.”

India: India Cements has signed a strategic collaboration agreement with 3D printing equipment supplier company Tvasta Manufacturing. The agreement establishes mutual strategic support between the partners in their efforts to develop new raw materials for use in 3D printing.

India Cements director Rupa Gurunath said "We are excited that Tvasta Manufacturing's technology delivers a cost-effective construction method that offers quicker turn-arounds as compared to conventional methods. But what we are particularly enthusiastic about is that this methodology is more eco-friendly, with lower consumption of water and sand."

India: The India Cements has launched Concrete Super King, a general application cement, and Halo Super King, a cement exclusively developed for use in the production of precast hollow dense concrete blocks.

Vice chair and managing director Narayanaswami Srinivasan said that many of the company’s customers already rely on its products in their precast hollow dense concrete block production. With the launch of Halo Super King, it hopes to further increase the ease of application.

India: Two pipe bombs have been found by police at India Cements plant at Sankarnagar, Tirunelveli in Tamil Nadu. The explosives were discovered after the plant manager was asked for a ransom of around US$70,000, according to the Indo-Asian News Service. Police suspect that the bombs were left at the site by former employees whose contracts were terminated due to coronavirus-related restrictions. However, terrorist activity is also being considered. The cement producer said that no one was hurt in the incident and production at the site continues uninterrupted.