Displaying items by tag: Madhya Pradesh

India: UltraTech Cement has selected Germany-based Aumund to supply conveyors, elevators and feeders for its ‘Project Spring’ expansion project to increase its installed production capacity to 130Mt/yr of cement from 117Mt/yr.

The expansion project includes three integrated cement production units in Madhya Pradesh, Rajasthan and Chhattisgarh, each with capacities of up to 10,000t/day. For these kiln lines, Aumund India will supply clinker cooler extraction conveyors as well as the transfer conveyors to the clinker silos. Six cement grinding plants in various locations in India are also part of the capacity expansion plans.

Aumund will supply six pan conveyors, 11 Samson material feeders and 68 bucket elevators including up to 157m-high kiln feed bucket elevators, up to 2200t/hr roller press recirculation bucket elevators and clinker and cement handling bucket elevators, among other products. The order is one of the largest to date for Aumund India.

India: Ambuja Cements subsidiary ACC has held the groundbreaking ceremony for its upcoming 2.7Mt Ametha integrated cement plant near Kymore, Madhya Pradesh. The company says that the plant will be equipped with an additional 1Mt/yr grinding unit and a 15MW waste heat recovery (WHR) plant. It estimated that the new plant will generate over 5000 indirect jobs. The producer currently operates 3.6Mt/yr of clinker production and 2.7Mt/yr of grinding capacity in the state.

LafargeHolcim India chief executive officer and Ambuja Cements managing director and chief executive officer Neeraj Akhoury said, “Our Business Excellence Journey has been successful on account of the continuous support and guidance rendered to us by the State Government. It is a great privilege and honour for us to be one of the pioneers in the industrialisation journey of Madhya Pradesh. The new project will further strengthen our partnership and propel the growth of the State.”

India: A raid by customs officers on an alleged fake cement production facility near Manpur, Madhya Pradesh, has resulted in the recovery of 250 bags of fake cement. Also present were large quantities of fly ash and low-quality cement, as well as further empty cement bags. The bags bore UltraTech Cement branding. The Free Press Journal has reported the operation was situated in a shed adjacent to a roadside restaurant. Police are searching for an individual seen fleeing the site at the time of the raid.

India: Prism Johnson is considering investing US$19m in a 0.9Mt/yr expansion of its 6.1Mt/yr Prism cement plant in Satna, Madhya Pradesh. Reuters News has reported that the proposal remains in the first round of discussions.

The group revenue for its cement division fell by 8.3% year-on-year to US$241m for the nine months to the end of December 2020 from US$263m in the same period in 2019. Its cement and clinker sales volumes fell by 5% to 3.93Mt from 4.13Mt.

India: Police have made arrests in Ujjain, Madhya Pradesh where cement was being bagged in falsely branded UltraTech Cement bags. The Free Press Journal has reported that the authorities confiscated over 1000 bags in the raid. They believe that the plant has been operative since 2018. Investigations continue, including a manhunt for suspected ringleader Jitendra Singh.

India: JK Cement has increased the capacity of its Katni wall putty plant in Madhya Pradesh to 700,000t/yr from 400,000t/yr. Projects Today News has reported that the putty consists mainly of JK Cement white cement. The company now has a wall putty production capacity of 1.2Mt/yr.

India: Dalmia Cement has imported 3830t of fly ash from a National Thermal Power Corporation (NTPC) power plant in Uttar Pradesh for use at its 0.8Mt/yr-capacity integrated Calcom cement plant in Assam. United News of India has reported that the supplementary cementitious material (SCM) travelled over 1000km.

62.9GW-total capacity NTPC produces 65Mt/yr of fly ash, some of which is used by ACC at its cement plants in Uttar Pradesh, Madhya Pradesh and Punjab.

India: Germany-based HeidelbergCement has announced the successful expansion of two grinding plants. Accord Fintech News has reported that the company took advantage of the suspension of cement production since 24 March 2020 to complete debottlenecking work at the Jhansi, Uttar Pradesh, and Imlai, Madhya Pradesh, grinding plants, bringing their cement production capacities to 3.3Mt/yr and 2.5Mt/yr respectively.

HeidelbergCement India has an integrated capacity of 3.7Mt/yr and a grinding capacity of 6.3Mt/yr (total capacity: 10Mt/yr).

India: Wonder Cement has launched a new 2Mt/yr grinding plant at Badnawar in Madhya Pradesh. It follows the company’s first grinding plant at Dhule in Maharashtra that was launched in mid-2018, according to the Pioneer newspaper. The cement producer plans to open a third grinding plant at Jhajjar in Haryana to reach a combined production capacity of 13Mt/yr in 2020. The new grinding units have a cost of US$112m.

Congratulations are due to India’s UltraTech Cement this week for finally completing its US$2.5bn asset purchase from Jaiprakash Associates. The deal has been around in some form or another since at least 2014 when UltraTech arranged to buy two cement plants in Madhya Pradesh for around US$750m. That deal, publicly at least, became a victim of the 2015 amendment to India’s Mines and Minerals (Development and Regulation) (MMDR) Act. The Bombay High Court eventually rejected it in early 2016 after a period of delays. However, the deal bounced back in a much larger form around the same time and since then everything has gone relatively smoothly.

As chairman Kumar Mangalam Birla put it in his letter to shareholders in the company’s 2016 – 2017 annual report the, “move is essentially for geographic market expansion.” He then went on to mention all the usual keywords like ‘synergy’ and ‘economies of scale’ that you expect from an acquisition. Quite rightly he finished with, “It is with great pride that I record, that UltraTech is the largest cement player in India and the fifth largest on the world stage.” On that last point he meant outside of China but UltraTech does have a small number of assets outside of India, notably in the UAE, Bahrain, Oman and Bangladesh, hinting at an international future for the cement producer.

Map 1: UltraTech Cement’s plants in India. Source: UltraTech Cement Corporate Dossier, January 2017.

To give a scale of the deal, UltraTech has increased its number of integrated cement plants in India to 18 from 12 and its cement grinding plants to 21 from 16. Its overall cement production capacity will increase by nearly 40% to 91.4Mt/yr from 66.3Mt/yr. The new assets are in Himachal Pradesh, Uttar Pradesh, Uttarakhand, Madhya Pradesh and Andhra Pradesh. The main regions that will benefit are the North, Central and South zones. In particular the Central Zone will see its capacity jump to 21.1Mt/yr from 6.2Mt/yr. This area also includes a new 3.5Mt/yr plant at Dhar in Madhya Pradesh that is scheduled for commercial production in late 2019.

The completion of the Jaiprakash Associates deal was followed by the introduction at the start of July 2017 of the Goods and Services Tax (GST), a rationalisation of some of the country’s central and state taxes. UltraTech promptly said it had reduced its product prices by 2 – 3% in light of tax reductions under the new regime. Some producers were warning of a rise in cement prices in the run-up to the introduction of the GST and the Cement Manufactures’ Association said that the new tax rate was insufficient. However, UltraTech said that the new tax rate of 28% was better than 30 – 31% previously. Other Indian producers also reduced their prices this week following the introduction of the GST.

UltraTech’s expansion and the start of the new tax scheme auger well for the Indian cement industry in 2017. Demonetisation knocked cement production at the start of the year and it may have lowered UltraTech’s capacity utilisation rate as well as reducing domestic sales by cutting housing demand. However, sector rationalisation and a simpler tax approach should help to remedy this. Not all government interaction has been helpful to the cement industry in recent years as the MMDR amendment and demonetisation show but the signs are promising.
Roll on the next set of financial reports.