Government initiatives for development of Tier II and Tier III cities may create more demand for cement and the availability of consumers is shifting the focus of cement industries towards these cities, says Suman Mukherjee, Managing Director & CEO, Shree Digvijay Cement Company, a CIMPOR Group company, in an exclusive interview with Indian Cement Review.Could you provide highlights on the performance of the company?Shree Digvijay Cement Co. Ltd. (SDCCL) belongs to CIMPOR group with headquarter at Lisbon, Portugal. Presently it is going through a change of management control globally. During these days SDCCL has maintained a steady and consistent growth rate in terms of turnover, EBITDA, sales and productivity. If we compare performance YoY basis, our turnover has increased 27 per cent. Market share has also seen a steady growth to 6 per cent. We have also improved our productivity as compared to previous year. Our clinker and cement production increased by around 13-14 per cent.What factors are important for driving positive growth?
Success and growth of any organisation depends primarily on the motivation level of its employees. India is the second largest cement producer after China. The cement market is expected to grow at a steady rate of 8-9 per cent on an average, approximately at a ratio 1.1 times of GDP. To keep pace with this growing market we have set our long term vision and roadmap towards that vision. We have prioritised few things like safety/productivity/cost/ sales etc, safety being our topmost priority. Brand image also plays a major role for positive growth and motivation. We keep continuous focus on each of these priorities. As a group we always believe in sustainable growth. To achieve our vision we have a highly motivated team of people who are working relentlessly to fulfill our growth strategy. We maintain around 5-6 per cent share in the market we operate.Could you comment on the government’s contribution to the development of the cement industry?
Government initiatives towards infrastructural development can be a contributing factor towards development of cement industry. The quantum of project to be executed is good enough to propel the economy for the next few years or so even if no new project is announced. However, operational cost of cement industries are going high due to increasing cost of raw materials, fuels, power. To combat with the increasing cost few things can be considered like, duty free import of raw materials/consideration of wharf age charges and handling losses on exports of clinker/soft loan for port development/VAT or CENVAT credit on limestone royalty and duty/cess on indigenous coal/ rationalization of excise duty rate on cement from 12 per cent and bring it at par with other core and infrastructure industries/treatment of waste heat recovery as renewable energy source/generation based incentive on wind energy/open access power etc.Can you elaborate on innovation and product development in your company?I believe SDCCL is the only company in India capable of producing six types of cements, namely OPC GR 43, OPC GR 53, PPC, SRPC, OWC, OPC 53 S.What are the issues faced by cement industry? What measures are required to tackle these issues?Presently one of the key issues many cement industries are facing is limestone reserves. After the new regulation of eco-sensitive zone, the fate of many existing limestone reserves are under a big question mark. Land acquisition and getting environment clearance are very much lengthy and time-consuming for new mining lease. Apart from this, increasing cost of raw materials/fuel/power are points of concern.Where do you see your company in the next five years?We always believe in sustainable growth. Globally, as a part of CIMPOR Group, we are very much ambitious about the future of our company in India. As a group strategy we want to increase our market share in the existing market.What is your opinion about markets for the cement industry in Tier II and Tier III cities?
Infrastructural development in Tier II and Tier III cities are very much encouraging for cement industries in the upcoming days. Government initiatives towards development of Tier II and Tier III cities may create more demand for cement in these cities. Various industrial hubs are growing up in these cities. Availability of good number of consumers is shifting the focus of cement industries towards Tier II and Tier III cities.What ‘green’ initiatives has the company taken for more sustainable sources of energy?Globally and as well as in India we are a member of CSI. We have installed WHRPP for captive power generation. It is under commissioning stage. This is a CDM initiative to reduce emission and clean environment. Once it is fully operational we can reduce equivalent amount of CO2 emission. Our continuous effort to maximise fly ash addition to cement within permissible limit is ongoing.