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Lafarge Cement

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Lafarge’s total cement production capacity in the Indian market currently stands at around 8 million tonne. Lafarge India has charted plans to expand its presence nationally in the coming years. In addition to capacity expansions at Sonadih and Jojobera, the Company is building on the success of its regional development models and is in the process of starting projects in Rajasthan, Karnataka, Meghalaya and Himachal Pradesh.Lafarge entered the Indian market in 1999, through its cement business, with the acquisition of Tata Steel’s cement activity. This acquisition was followed by the purchase of the Raymond Cement facility in 2001. Lafarge currently has four cement plants in India: two plants in the state of Chhattisgarh (Sonadih and Arasmeta) and Grinding Units in Jharkhand (Jojobera) and West Bengal (Mejia).In recent years, Lafarge has significantly enlarged its operations across its three business divisions – Cement, Aggregates & Concrete and Gypsum. Lafarge today is the market leader in the ready-mix concrete business with around 80 plants, following its acquisition of L&T Concrete with an annual capacity of around 6.3 million cubic metres.Lafarge has been committed to sustainable development for many years, pursuing a strategy that combines industrial know-how with performance, value creation, respect for employees and local cultures, environmental protection and the conservation of natural resources and energy. To make advances in building materials, Lafarge places the customer at the heart of its concerns. It offers the construction industry and the general public innovative solutions bringing greater safety, comfort and quality to their everyday surroundings. Safety is the cornerstone of the Company’s performance culture and long-standing people-centric tradition. All Lafarge India plants have an innate culture of safety consciousness and assured best-in-class Health & Safety standards.Products offered:Long-standing international experience and wide diversity of the Lafarge Group provides the company with unrivalled understanding on the intrinsic properties of cement and its premium quality. Lafarge Cement currently holds the leadership position in Eastern Indian markets, producing high performance blended cements in Portland Slag Cement (PSC) and Portland Pozzolona Cement (PPC) variants. Lafarge enjoys high brand equity through its different brands; Lafarge Concreto, Lafarge Duraguard and Lafarge Cement.BRANDS DuraguardThe strength and longevity of cement depends on its granular composition along with its chemical constituents. Research further proves that the unique particle size distribution of Duraguard cement helps in making a denser concrete, which prevents the porosity as well as the water ingress. The use of high quality cementitious material helps in converting the free lime to cement, leading to prevention of leeching which ultimately gives higher impermeability. This also reduces development of cracks due to shrinkage & expansion of the structure caused by the environmental stress.Lafarge ConcretoConcreto was developed in Lafarge’s state-of-the art laboratories, which are extensively networked with its Central Research Institute in France. The company has leveraged its combined know-how of more than 170 years and its experience across 75 countries to develop this unique productLafarge Concreto a premium cement of international standards from the house of Lafarge can fulfill the artistic needs of an individual. Along with superior structural strength and enhanced durability, Lafarge Concreto is the only cement that also offers aesthetic benefits. Other than acting as very strong home-building cement, Lafarge Concreto also adds value to a building by becoming the key factor in its decor. Concreto is malleable and can easily form any shape required by the homebuilder.Lafarge CementLafarge Cement is a very high performance blended Portland Slag Cement available in the major markets in East India. Lafarge Cement is well accepted and appreciated by the consumers for its superior product quality and the consistency in product delivery.Lafarge Cement is suitable for all types of the construction applications -Residential Building, Complexes, RCC work, Multistoried buildings, Mass concrete works, underground concrete works like foundations, roofing and all types of plasters, masonry works etc.Home building centerGoing beyond product innovation, Lafarge India established the unique Home Building Centres to help homebuilders create their dream homes. A first-of-its-kind initiative in India, these centres provide homebuilders the opportunity to interact with different construction experts and find out how to save time, money and effort, explore design options and decide on the right building materials and more.Lafarge Invention AwardsInnovation is a strategic priority for Lafarge, which dedicates 150 million euros per year to technology and innovation in products, systems and industrial processes. With an industrial presence in India spanning more than 10 years, Lafarge is today seeking to promote innovation for sustainable construction in India and to strengthen its ties with materials science and construction experts across the country.Lafarge, has announced the launch of the Lafarge Invention Awards 2011, a competition to reward innovative projects in India related to building materials and contributing to sustainable construction. The competition will target entrepreneurs or new companies, engineering consultants, architects, researchers and academics in India, who will have from September 1st until November 30, 2011 to submit their entries, via a secure website www.lafarge-inventionawards.com.The fast pace of Indian economic and demographic growth is generating immense needs for new infrastructure and housing, which must be met through new, innovative approaches to construction that take into account social, economic and environmental imperatives.Announcing the launch of the competition, Pascal Casanova, Director of Research and Development at Lafarge, said, "Developing solutions to meet the specific needs of the Indian market requires close partnership with local actors in the construction chain. This is why we recently opened a joint laboratory with IIT Madras to push research on concrete quality and durability. We are today seeking to strengthen our collaboration with Indian construction innovators, through the Lafarge Invention Awards 2011."The Lafarge Invention Awards aim to reward innovative projects related to Lafarge building materials – aggregates, cement, concrete and gypsum – and that contribute to sustainable construction. Projects submitted should be based on an invention less than 5 years old. They should involve a new product, industrial process, construction method or service and should have reached at least the prototype phase, ideally demonstrated in a real construction project. The competition was first launched in 2010, focusing on the European market for its first edition.The three winning projects from the Lafarge Invention Awards 2011 will be selected in March 2012, by a panel of Lafarge executives and renowned experts, with prize winners receiving respectively Rs 10,00,000 INR, Rs 500,000 and Rs 2,50,000.Iit madras & lafarge collaborate to scale new heights in concrete researchLafarge Research Center, the R&D wing of Lafarge Group, collaborated with IIT Madras, Chennai to conduct research on the durability and long term performance of concrete. Lafarge and the Department of Civil Engineering of Indian Institute of Technology Madras is setting up a state-of-the-art laboratory dedicated to the study of the mechanisms influencing the degradation of reinforced concrete structures.FICCI Safety excellence awardLafarge India bagged the Platinum Award (1st Prize) in the large scale manufacturing units category. Lafarge India was selected from over 200 companies who participated in the evaluation. A thorough audit of compliance of Health & Safety Standards by a distinguished panel was undertaken at Lafarge India’s Sonadih Cement Plant. The Sonadih plant offered potent glimpses of how implementation and practice of Health & Safety parameters like WAH (Working at Height), PPE (Personal Protective equipments) usage, Energy Isolation, LOTOTO (Lock Out, Tag Out, Try Out) and Transportation Safety by Lafarge India has lead to continuous improvement in performance.At Lafarge India Health & Safety is of topmost priority. The company has undertaken various initiatives over the years to create a safety culture among its employees and all stakeholders. The month of June every year is celebrated as a Health & Safety month across all Lafarge sites globally and in India to help exchange learnings and processes and engage people towards creating greater awareness for health & safety. Due to its stringent policies and procedures, Lafarge India has been able to clock 42 million man hours without any major incident or accident.Uday Khanna, Chairman, Lafarge India says, "We are delighted to have won the Platinum Award (1st Prize) for FICCI Safety Excellence Award. This is a very positive development and represents the industry’s acknowledgement of the Health & Safety initiatives being undertaken by Lafarge India across all its plants. Lafarge places the stakeholders at the heart of its concerns. We sincerely hope that these initiatives will contribute in achieving "zero fatal accident" rate and "zero work related illness" rate so that Lafarge can have one of the best health and safety records among global industrial groups."Earlier in the year, CII Eastern Region recognized the work being done by our teams in creating awareness about safety practices within and outside plant premises. Lafarge India bagged the second prize of the Safety, Health & Environment Award 2010-11.Corporate Social ResponsibilityLafarge India as a Group is convinced that sustained economic growth cannot occur without respect for local communities, social progress and environmental protection. The Year 2010-2011 has seen the further strengthening of our corporate social responsibility program.Quoting from Lafarge’s Principles of Action: "Wherever present we operate with the utmost respect for the common interest of present and future generations; we act as responsible members of our communities by contributing to the development of people, their health, rights and well-being by generating economic growth and supporting social, educational and cultural advancement."Community needs assessmentA comprehensive Community Needs Assessment (CNA) survey was conducted in villages across 7 states; Chhattisgarh, Himachal Pradesh, Jharkhand, Karnataka, Meghalaya, Rajasthan and West Bengal.The objectives of the CNA Study was to undertake an assessment of community needs using a participatory approach, authenticate and validate the communities perceived needs vis-a-vis actual conditions and mapping of basic needs and poverty incidence.CSR Core VerticalsSurakshit Bharat : Safety Initiatives : 3 States, 14 Villages, 22,008 Citizens Swasth Bharat : Health Initiatives 4 States, 32 Villages, 44,699 Citizens Saksham Bharat : Employability Initiatives : 5 States, 47 Villages, 935 Citizens Sakshar Bharat : Education Initiatives ; 5 States, 56 Villages, 4,241 Students Dwellings and Other Rural InfrastructureDue to a resource crunch most rural communities are not able to build their rural infrastructure. Lafarge India through it’s foundation NIDHEE has helped address several community infrastructure issues by building community halls, refurbishment of local temples, upgradation of libraries, construction of school boundary walls, improvement and cleaning of drainage areas, building a passenger waiting area at railway stations etc.Sustainable DevelopmentLafarge has renewed its commitment to sustainable development with the launch of its Sustainability Ambitions 2012. This roadmap puts people and the environment at the heart of the Group’s concerns.Cementitious materials like fly ash and slag, by-products of the power and steel industries are used in cement manufacture to decrease CO2 emissions, reduce the quantity of natural resources used and facilitate the disposal of industrial wastes.Lafarge screens all its quarries and has introduced a biodiversity plan for its sites. The quarry restoration programme in India led to planting of 1.5 million trees.Lafarge’s stringent systems for quality control and environment protection through monitoring of emissions, discharges and a strong focus on Health & Safety have earned it ISO 9001, ISO 14001 and OHSAS1801 accreditations.

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Price hikes, drop in input costs help cement industry to post positive margins: Care Ratings

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Region-wise,the southern region comprises 35% of the total cement capacity, followed by thenorthern, eastern, western and central region comprising 20%, 18%, 14% and 13%of the capacity, respectively.

The cement industry is expected to post positive margins on decent price hikes over the months, falling raw material prices and marked drop in overall production costs, said an analysis of Care Ratings.

Wholesale and retail prices of cement have increased 11.9% and 12.4%, respectively, in the current financial year. As whole prices have remained elevated in most of the markets in the months of FY20, against the corresponding period of the previous year.

Similarly, electricity and fuel cost have declined 11.9% during 9M FY20 due to drop in crude oil prices. Logistics costs, the biggest cost for cement industry, has also dropped 7.7% (selling and distribution) as the Railways extended the benefit of exemption from busy season surcharge. Moreover, the cost of raw materials, too, declined 5.1% given the price of limestone had fallen 11.3% in the same aforementioned period, the analysis said.

According to Care Ratings, though the overall sales revenue has increased only 1.3%, against 16% growth in the year-ago period, the overall expenditure has declined 3.2% which has benefited the industry largely given the moderation in sales.

Even though FY20 has been subdued in terms of production and demand, the fall in cost of production has still supported the cement industry by clocking in positive margins, the rating agency said.

Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. The cement sector will be seeing a sharp growth in volumes mainly due to increasing demand from affordable housing and other government infrastructure projects like roads, metros, airports, irrigation.

The government’s newly introduced National Infrastructure Pipeline (NIP), with its target of becoming a $5-trillion economy by 2025, is a detailed road map focused on economic revival through infrastructure development.

The NIP covers a gamut of sectors; rural and urban infrastructure and entails investments of Rs.102 lakh crore to be undertaken by the central government, state governments and the private sector. Of the total projects of the NIP, 42% are under implementation while 19% are under development, 31% are at the conceptual stage and 8% are yet to be classified.

The sectors that will be of focus will be roads, railways, power (renewable and conventional), irrigation and urban infrastructure. These sectors together account for 79% of the proposed investments in six years to 2025. Given the government’s thrust on infrastructure creation, it is likely to benefit the cement industry going forward.

Similarly, the Pradhan Mantri Awaas Yojana, aimed at providing affordable housing, will be a strong driver to lift cement demand. Prices have started correcting Q4 FY20 onwards due to revival in demand of the commodity, the agency said in its analysis.

Industry’s sales revenue has grown at a CAGR of 7.3% during FY15-19 but has grown only 1.3% in the current financial year. Tepid demand throughout the country in the first half of the year has led to the contraction of sales revenue. Fall in the total expenditure of cement firms had aided in improving the operating profit and net profit margins of the industry (OPM was 15.2 during 9M FY19 and NPM was 3.1 during 9M FY19). Interest coverage ratio, too, has improved on an overall basis (ICR was 3.3 during 9M FY19).

According to Cement Manufacturers Association, India accounts for over 8% of the overall global installed capacity. Region-wise, the southern region comprises 35% of the total cement capacity, followed by the northern, eastern, western and central region comprising 20%, 18%, 14% and 13% of the capacity, respectively.

Installed capacity of domestic cement makers has increased at a CAGR of 4.9% during FY16-20. Manufacturers have been able to maintain a capacity utilisation rate above 65% in the past quinquennium. In the current financial year due to the prolonged rains in many parts of the country, the capacity utilisation rate has fallen from 70% during FY19 to 66% currently (YTD).

Source:moneycontrol.com

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Wonder Cement shows journey of cement with new campaign

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The campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV…

ETBrandEquity

Cement manufacturing company Wonder Cement, has announced the launch of a digital campaign ‘Har Raah Mein Wonder Hai’. The campaign has been designed specifically to run on platforms such as Instagram, Facebook and YouTube.

#HarRaahMeinWonderHai is a one-minute video, designed and conceptualised by its digital media partner Triature Digital Marketing and Technologies Pvt Ltd. The entire journey of the cement brand from leaving the factory, going through various weather conditions and witnessing the beauty of nature and wonders through the way until it reaches the destination i.e., to the consumer is very intriguing and the brand has tried to showcase the same with the film.

Sanjay Joshi, executive director, Wonder Cement, said, "Cement as a product poses a unique marketing challenge. Most consumers will build their homes once and therefore buy cement once in a lifetime. It is critical for a cement company to connect with their consumers emotionally. As a part of our communication strategy, it is our endeavor to reach out to a large audience of this country through digital. Wonder Cement always a pioneer in digital, with the launch of our IGTV campaign #HarRahMeinWonderHai, is the first brand in the cement category to venture into this space. Through this campaign, we have captured the emotional journey of a cement bag through its own perspective and depicted what it takes to lay the foundation of one’s dreams and turn them into reality."

The story begins with a family performing the bhoomi poojan of their new plot. It is the place where they are investing their life-long earnings; and planning to build a dream house for the family and children. The family believes in the tradition of having a ‘perfect shuruaat’ (perfect beginning) for their future dream house. The video later highlights the process of construction and in sequence it is emphasising the value of ‘Perfect Shuruaat’ through the eyes of a cement bag.

Tarun Singh Chauhan, management advisor and brand consultant, Wonder Cement, said, "Our objective with this campaign was to show that the cement produced at the Wonder Cement plant speaks for itself, its quality, trust and most of all perfection. The only way this was possible was to take the perspective of a cement bag and showing its journey of perfection from beginning till the end."

According to the company, the campaign also marks Wonder Cement being the first ever cement brand to enter the world of IGTV. No other brand in this category has created content specific to the platform.

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In spite of company’s optimism, demand weakness in cement is seen in the 4% y-o-y drop in sales volume. (Reuters)

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Cost cuts and better realizations save? the ?day ?for ?UltraTech Cement, Updated: 27 Jan 2020, Vatsala Kamat from Live Mint

Lower cost of energy and logistics helped Ebitda per tonne rise by about 29% in Q3
Premiumization of acquired brands, synergistic?operations hold promise for future profit growth Topics

UltraTech Cement
India’s largest cement producer UltraTech Cement Ltd turned out a bittersweet show in the December quarter. A sharp drop in fuel costs and higher realizations helped drive profit growth. But the inherent demand weakness was evident in the sales volumes drop during the quarter.

Better realizations during the December quarter, in spite of the 4% year-on-year volume decline, minimized the pain. Net stand-alone revenue fell by 2.6% to ?9,981.8 crore.

But as pointed out earlier, lower costs on most fronts helped profitability. The chart alongside shows the sharp drop in energy costs led by lower petcoke prices, lower fuel consumption and higher use of green power. Logistics costs, too, fell due to lower railway freight charges and synergies from the acquired assets. These savings helped offset the increase in raw material costs.

The upshot: Q3 Ebitda (earnings before interest, tax, depreciation and amortization) of about ?990 per tonne was 29% higher from a year ago. The jump in profit on a per tonne basis was more or less along expected lines, given the increase in realizations. "Besides, the reduction in net debt by about ?2,000 crore is a key positive," said Binod Modi, analyst at Reliance Securities Ltd.

Graphic by Santosh Sharma/Mint
What also impressed analysts is the nimble-footed integration of the recently merged cement assets of Nathdwara and Century, which was a concern on the Street.

Kunal Shah, analyst (institutional equities) at Yes Securities (India) Ltd, said: "The company has proved its ability of asset integration. Century’s cement assets were ramped up to 79% capacity utilization in December, even as they operated Nathdwara generating an Ebitda of ?1,500 per tonne."

Looks like the demand weakness mirrored in weak sales during the quarter was masked by the deft integration and synergies derived from these acquired assets. This drove UltraTech’s stock up by 2.6% to ?4,643 after the Q3 results were declared on Friday.

Brand transition from Century to UltraTech, which is 55% complete, is likely to touch 80% by September 2020. A report by Jefferies India Pvt. Ltd highlights that the Ebitda per tonne for premium brands is about ?5-10 higher per bag than the average (A cement bag weighs 50kg). Of course, with competition increasing in the arena, it remains to be seen how brand premiumization in the cement industry will pan out. UltraTech Cement scores well among peers here.

However, there are road bumps ahead for the cement sector and for UltraTech. Falling gross domestic product growth, fiscal slippages and lower budgetary allocation to infrastructure sector are making industry houses jittery on growth. Although UltraTech’s management is confident that cement demand is looking up, sustainability and pricing power remains a worry for the near term.

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