Displaying items by tag: India Cements

India: South India's largest cement producer by volume, India Cements, has reported that its revenue fell by 54% to US$4.84m in the quarter ending on 31 December 2012. The producer reported US$10.4m in the same period in 2011.

However, the company's revenues rose by 14.82% to US$200m in the quarter. The company's earnings before interest, taxes, depreciation and amortisation (EBIDTA) remained steady at US$36.1m. .

"Considering the problems we had in the quarter the performance is good. Almost all costs went up sharply. For example, freight and handling costs are up 25% year-on-year," said vice chairman and managing director N Srinivasan. "For us, the EBIDTA is steady at around 18% sequentially when there was substantial drop in margins for competitions."

Srinivasan added that India Cements' expansion into many locations also helped to increase capacity utilisation in the quarter, which was about 70%. The company is looking at strong growth in some of the markets like Gujarat. It is also contemplating adding one more production line in its Mahi plant in Rajasthan, which currently has a capacity of 1.3Mt/yr. The proposed expansion may entail an investment of up to US$130m.

India: India Cements has started gathering documentation for a 3Mt/yr expansion at two of its plants in Tamil Nadu. The company's next step is to secure clearance for these projects.

Brownfield expansions are being planned for Dalavoi, in Ariyalur district of Tamil Nadu, where the company plans to add a new line that will add over 2.55Mt/yr to the existing 2.16Mt/yr cement capacity. This will increase the total capacity at the plant to 4.71Mt/yr. A 40MW captive power plant will also be set up to supply electricity for the upgrade. At Sankaridurg the company plans to double the capacity of its 0.7Mt/yr plant.

If approved, the upgrades will increase India Cements' capacity to 15.5Mt/yr in its eight plants in Tamil Nadu, Andhra Pradesh and Rajasthan.

India: India Cements has reported a 39% drop in net profit for the quarter ending 30 June 2012. Profit fell to US$11.2m from US$18.4m in the same quarter in 2011. However, the company earnings before interest, taxes and amortisation (EBITDA) rose by 14%, to US$50.9m from US$40.1m.

The Chennai-based cement manufacturer's total income, which also includes revenue from Indian Premier League (IPL) franchise Chennai Super Kings, rose by 13.5% to US$218m from US$192m. Total expenses increased by 13% to US$167m from US$147m, mainly due to higher fuel consumption and transportation costs.

"Our primary focus this quarter has been on maintaining the margins despite increases in rail fares, power tariff revision in our states of operation, increases in wages and a substantial depreciation of Rupee against the US Dollar pushing up prices of imported coal," commented N Srinivasan, vice chairman of India Cements. He also added that in the reported quarter the company has continued to work on infrastructure connecting its coalmines to ports in Indonesia.

Cement production stayed stable for the quarter at 2.35Mt in 2012 against 2.32Mt in 2011. Cement and clinker sales also reported little change, with 23.8Mt in 2012 reported against 23.1Mt in 2011.

India: In one of the largest fines of its kind, India's antitrust body has imposed a penalty of a combined US$1.1bn on 11 cement companies for price fixing. The companies penalised by the Competition Commission of India (CCI) include ACC and Ambuja Cements (both units of Swiss cement-maker Holcim), UltraTech Cement, Jaiprakash Associates, India Cements, Madras Cements and the local unit of France's Lafarge.

"The commission has found that the cement companies have not utilised the available capacity, so as to reduce supplies and raise prices in times of higher demand," said the CCI in its judgement. It said that the penalty on each company amounted to 50% of their profit for the financial years 2009-10 and 2010-11.

ACC has been fined US$201m and Ambuja has to pay US$204m. India's largest producer of the building material, Ultratech Cement, has to pay US$206m, while Lafarge's Indian unit will have to shell out US$84m. Jaiprakash Associates has been fined US$232m.

On 21 June 2012 the CCI said that the cement companies' action of limiting supplies to the market through an 'anti-competitive agreement' was not only detrimental to consumers but also to the economy, as the building material is a critical input for infrastructure projects. The regulator asked the companies to pay the fine within 90 days. The companies can challenge the regulator's orders in the Competition Appellate Tribunal, a quasi-judicial body and can then appeal to India's Supreme Court.

In response UltraTech said that it hasn't indulged in any cartelisation and that it would appeal against the order in the appellate tribunal. In Zurich Holcim said it would, "contest the allegations and findings against (ACC and Ambuja) in the order and will pursue all available legal steps to defend their respective positions." In Paris Lafarge said, "We will see the detailed report and decide the suitable actions to take. Lafarge has a strict policy to comply with competition laws."

The CCI started accepting cases in 2009, replacing a relatively toothless antitrust body that had been in place since 1970, and has been becoming increasingly assertive. The biggest penalty it had imposed so far was in 2011, when it ordered DLF Ltd., India's biggest property developer by sales, to pay US$120m for abusing its dominant market position by changing agreements signed with some property buyers.

The judgement comes at a bad time for cement companies, as demand for construction materials is weak due to sluggish economic growth and a fall in spending on infrastructure projects. The cost of raw materials such as coal is on the rise as well, pressuring margins.

India: South India's largest cement maker by volume, The India Cements Ltd, has received clearance from the environment ministry to proceed with capacity expansion of its existing two plants.

The company sought the Terms of Reference (TOR) approval for expanding capacities in Padaveedu, Salem district at its Sankaridurg plant and in Dalavoi, Ariyalur district. The green ministry approved the TRO of India Cements on 25 April 2012 and 26 April 2012 respectively.

Company officials maintain that this is only a process and nothing has been finalised vis-a-vis expansion of capacities. "We are getting the required approvals in advance. Nothing is on the board. We want to be ready and when there is a need we should not be seen as waiting for regulatory approvals," said a company official.

India: India Cement Ltd announced its standalone and consolidated annual results for the year ending 31 March 2011 on 30 May 2011.The company registered a decline in its net sales by 7.17% to US$778.9m for the year ended 31 March 2011 from US$839.1m registered in the previous fiscal year. Total expenditure (excluding depreciation) increased by 4.15% and for the 2011 fiscal year it stood at US$682.4m, up from US$6.552m. The rise in expenditure was attributed to increases in power and fuel charges. In line with this company posted a net profit of US$15.15m, down from US$78.83m in the preivous fiscal year, a tremendous decline of nearly 81%.

The cement industry, which recorded impressive double-digit growth in the last four years, entered a phase of decelleration with the demand slackening during the year under review and registered a growth of 'only' 4.7%. An analysis of the demand reveals that while the growth in the west of India was 11.7% followed by the east at 10.3%, the central region at 9.7% and the north at 3.1%, the south registered a contraction of 3.4%. Within the south, Andhra Pradesh registered a significant decline of 17.1% in demand. With substantial increase in the capacity in the southern region, this negative growth had put pressure on cement prices, which reached their lowest level in the past five years during the second quarter of the period under review.

Over all capacity utilisation for the industry fell to 76% and in the south capacity utilisation was at just 66%.