
Displaying items by tag: Ramco Cement
Ramco Cements commissions US$68,500 oxygen plant to help fight against Covid-19 outbreak
18 May 2021India: Ramco Cements has commissioned a 48 cylinder/day oxygen plant at its Ramasamy Raja Nagar cement plant in Virudhunagar district, Tamil Nadu. It is donating the oxygen to local hospitals treating Covid-19 patients. The cost of the plant was US$68,500. Each 45l cylinder has a useful life of 10 – 12 hours. The company says that the new plant will save around 24 lives a day.
Ramco Cements plans capacity expansion
15 March 2021India: Ramco Cements says that its 16Mt/yr installed production capacity will increase to 20Mt/yr during its 2022 financial year that starts in April 2021 with the completion of a new plant at Kurnool in Andhra Pradesh and a third production line at its Jayanthipuram plant. The original plan to complete the work by the end of March 2021 was delayed by the coronavirus pandemic, according to the Hindu newspaper. The new integrated plant at Kurnool will have a clinker capacity of 2.25Mt/yr and a cement production capacity of 1Mt/yr. The third production line at the Jayanthipuram plant will have a production capacity of 1.5Mt/yr, increasing the plant’s total to 4.5Mt/yr.
The producer also plans to complete Phase 3 of the installation of a waste heat recover (WHR) unit at the Jayanthipuram plant. Phase 1 (9MW) was commissioned in September 2020, Phase 2 (9MW) in February 2021 and Phase 3 (9MW) is scheduled for after the third line is complete. So far the first two stages have reduced the cement plant’s power consumption from a thermal power plant by 15MW. The project has cost around US$30m.
Ramco Cements has spent US$345m out of its planned US$470m capital expenditure in the 2021 financial year, which ends on 31 March 2021.
Ramco Cements reports nine-month profit growth amid sales fall in 2021 financial year
04 February 2021India: Ramco Cements’ nine-month profit for the period ending on 31 December 2020 was US$77.9m, up by 23% year-on-year from US$63.3m in the corresponding period of the 2020 financial year. Cement sales volumes dropped by 18% to 67.6Mt from 82.7Mt. Its revenue from sale of products fell by 9% to US$488m from US$535m.
The company reported that it has redeposited US$3.54m for its appeal against cartelisation charges that carrya penalty of US$35.4m. It said, “The company, backed by legal opinion, believes that it has a good case and hence no provision is made.”
The cement producer plans to commission a 1.5Mt/yr clinker line and a 9MW waste heat recovery (WHR) system at Jayanthipuram, Andhra Pradesh and a 2.25Mt/yr clinker line at Kurnool, Andhra Pradesh in the first quarter of its 2021 – 2022 financial year. A 1Mt/yr grinding unit, a 12MW WHR unit and a thermal power plan are expected to be commissioned later in the year.
Haridaspur residents protest lack of local jobs outside Ramco Cements grinding plant in Odisha
21 January 2021India: Residents of Haridaspur in Jajpur District, Odisha, launched a protest on 20 January 2020 outside Ramco Cement’s 0.9Mt/yr Haridaspur grinding plant. The New Indian Express has reported that the people allege that the company has fail to delivered promised local jobs. They also accuse it of failing to provide concrete roads, drinking water, healthcare and lighting. The company said that it has yet to receive a memorandum of the protestors’ request.
Ramco Cements commissioned the Haridaspur grinding plant in late 2020.
India: France-based Fives says that Ramco Cements has ordered a second FCB TSV 5500 BF type classifier for raw material mixing at a plant in Tamil Nadu. The order follows the commissioning of a similar classifier from Fives at the same site. The upgrade is part of an overhaul of the unit’s grinding equipment. No price for the order or commissioning date has been disclosed.
Ramco Cements publishes first-half 2021 financial year results
03 November 2020India: Ramco Cements recorded sales of US$301m in the first half of the 2021 financial year, down by 15% year-on-year from US$354m in the first half of the 2020 financial year. Its profit was US$46.4m, down by 4% from US$48.4m.
The company said, “Business operations were severely disrupted during April 2020 in view of lockdown imposed by the government due to Covid-19. After relaxation of restrictions by the Government, business recovered gradually and is continuing with weak demand, especially in urban/semi-urban markets. The company continues to comply with the various operating guidelines issued by the relevant regulatory authorities from time to time. As per the current assessment of the company, there is no material impact on the carrying values of trade receivables, inventories and other financial/non-financial assets.”
Ramco Cement inaugurates grinding plant in Odisha
14 October 2020India: Naveen Patnaik, the chief minister of Odisha, has attended the inauguration of Ramco Cement’s new cement grinding plant at Haridaspur. The unit had a cost of just under US$100m and has created 105 direct jobs. A LM 46.2+2 CS type vertical roller mill with a capacity of 3750kW has ordered from Germany-based Loesche in 2018 for the project. The cement producer says that the plant is designed to be ‘totally dust free,’ including bag filters designed to ensure emission levels below 30mg/m3.
Ramco Cements commissions 9MW waste heat recovery power plant at Jayanthipuram cement plant
14 September 2020India: Ramco Cements has commissioned a 9MW waste heat recovery (WHR) power plant at its 3.7Mt/yr Jayanthipuram, Andhra Pradesh cement plant. Chief executive officer (CEO) Av Dharmakrishnan said, “Besides savings in power cost, the installation of WHR systems in our plants will also reduce CO2 emissions substantially, which will have a positive impact on the environment.”
BusinessLine Online News has reported that Ramco Cements is currently building a 12MW WHR power plant at its upcoming Kolumigundla, Andhra Pradesh cement plant. When the plant becomes operational it, will bring the company’s total WHR power generation capacity to 39MW.
Ramco Cement increases Lynks Logistics stake to 69%
07 September 2020India: Ramco Cement has increased its stake in Lynks Logistics to 69% following its acquisition of a 23% stake in the company for US$273,000. The group previously invested US$700 in a 46% stake on 27 January 2020.
Update on India, April 2020
08 April 2020As India reaches two weeks into its 21 day lockdown to combat coronavirus, the financial analysts are starting to publish their forecasts as to what the effects will be for the cement industry. The results are gloomy, with demand predicted to drop by up to 25% in the financial year to March 2021 by one analyst and 40% in March 2020 alone by another.
Graph 1: Indian cement production, rolling annual by month, January 2018 – February 2020. Source: Indian Ministry of Commerce & Industry.
The graph above sets the scene for what may be to come by showing the state of production in India in recent years. From early 2018 it picked up by 17% to 337Mt by March 2019 and stayed around there through the rest of year before breeching 340Mt in January and February 2020. The (relative) lull in production growth in 2019 was blamed by some analysts on the general election in mid-2019 and then the monsoon rains. In summary the market was improving and seemed set for further growth in 2020. Alas, this does not now seem to be the case.
Looking ahead, Rating’s agency CRISIL has published a research paper on the topic and here are some of the highlights. They break the damage down into two separate scenarios. The first, where the social distancing measures last until the end of April, cause a 10 – 15% fall in cement demand with the pain limited to the first quarter of the Indian financial year, which starts on 1 April. The second, where distancing measures last until June, cause a 20 – 25% decrease in demand, with the problems extended into the second quarter. Salient points that it makes about the anticipated recovery include a delay in infrastructure spending due to the government diverting funds to healthcare, reduced private and real estate markets and a divide between state-led affordable housing schemes in urban and rural areas. It pins its hopes on rural housing to grab demand first, followed by key infrastructure projects, especially transport schemes.
Examining the cement producers directly, CRISIL reckons that prices will fall in the face of dropping demand but that power, fuel and freight costs are all expected to fall also. Profit margins are forecast to drop compared to the 2019 – 2020 financial year but still remain higher than the two previous ones. Finally, it looked at the credit profiles of 23 companies, representing over 70% of installed production capacity. Together they had a total debt of US$7bn. It flagged up four of these companies as having high debt/earnings ratios and five with low interest coverage. The latter were described as ‘small regional firms with weak cash balances.’
That’s one view on what may happen but two recent general industry news stories offer snapshots on what may be to come for the Indian market. The first is an immediate consequence of a nationwide lockdown in a country with a population of 1.3bn and a low cost of labour. 400 construction workers at a grinding plant build for Ramco Cements in Haridaspur, Odisha, were stranded at the site when the quarantine restrictions stopped them travelling home to Bihar, Jharkhand and West Bengal. They took up residence at the building site and then protested when the food ran out. This point about migrant labour is noteworthy because how the Indian government relaxes the lockdown could have massive consequences upon how the construction industry recovers. A possible parallel from elsewhere in the world is the slowdown effect the Saudi Arabian cement industry suffered in late 2013 when the government took action against illegal foreign workers in the construction industry.
The second news story to keep in mind is the annual results from refractory manufacturer RHI Magnesita this week. It reported growing revenue from its cement and lime customers in 2019 but it blamed a weaker market in Europe on producers stockpiling product due to tightening magnesite and dolomite raw material availability. The takeaway here is that if supply chains supporting the cement sector and the rest of the construction industry in India at the moment are affected by the coronavirus outbreak, and government action to stop it, then there may be consequences later on. So far Global Cement hasn’t seen anything like this but the preparation for coronavirus advice from industry expert John Kilne has been to indentify and secure medium term needs, including refractory and critical spare parts and to consider potential disruption to supply chains.
In terms of what happens next once the lockdown ends in India (and other countries), one media commentator has described the response to coronavrius as the ‘hammer and the dance.’ The hammer is the economy-busting measures many governments have implemented to stop local epidemics. The dance is/are the measures that countries are using before and after an outbreak to keep it suppressed until a vaccine is developed. The worry for building material producers is how much the ‘dance’ disrupts business over the next year. All eyes will be on the East Asian producer market figures for the first quarter to see how this plays out.