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‘Consolidation of cement industry is expected in 2013’

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In 2013, consolidation is expected in cement industry in the medium-to-long-term with large M&A activities, says India Ratings agency. The agency expects credit profiles of large cement firms with superior cost position and pan-India presence to remain stable in 2013.

However, smaller companies with unfavourable cost structure and regional concentrations are likely to be under pressure, the agency said.

With credit growth of the housing sector at 13 per cent and that of the commercial real estate sector (CRE) at 4 per cent till November 2012, India Ratings expects the cement demand to grow between 5-8 per cent y-o-y in 2013. Cement production volume in 2012 was mainly driven by a relatively robust activity in housing and commercial real estate.

From September 2010 to March 2012, the average growth in credit to the housing sector was around 15 to 16 per cent in commercial real estate.

Large integrated players, who are among the top five in the country (in terms of production capacity), are likely to have median EBITDA margins in the range of 23 per cent to 24 per cent in 2013, comparable to the FY12 levels. However, smaller or partially-integrated players are likely to exhibit margins ranging from 17 to 19 per cent, lower than the median margins observed for such companies in FY12, the report said.

Concrete

CCU testbeds in Tamil Nadu

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Tamil Nadu is set to host one of India’s five national carbon capture and utilisation (CCU) testbeds, aimed at reducing CO2 emissions in the cement industry as part of the country’s 2070 net-zero goal, as per a news report. The facility will be based at UltraTech Cement’s Reddipalayam plant in Ariyalur, supported by IIT Madras and BITS Pilani. Backed by the Department of Science and Technology (DST), the project will pilot an oxygen-enriched kiln capable of capturing up to two tonnes of CO2 per day for conversion into concrete products. Additional testbeds are planned in Rajasthan, Odisha, and Andhra Pradesh, involving companies like JK Cement and Dalmia Cement. Union Minister Jitendra Singh confirmed that funding approvals are underway, with full implementation expected in 2025.

Image source:https://www.heavyequipmentguide.ca/

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Concrete

JSW Cement gears up for IPO

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JSW Cement has set the price range for its upcoming initial public offering(IPO) at US$1.58 to US$1.67 per share, aiming to raise approximately US$409 million. As reported in the news, around US$91 million from the proceeds will be directed towards partially financing a new integrated cement plant in Nagaur, Rajasthan. Additionally, the company plans to utilise US$59.2 million to repay or prepay existing debts. The remaining capital will be allocated for general corporate purposes.

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Concrete

Cement industry to gain from new infrastructure spending

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As per a news report, Karan Adani, ACC Chair, has said that he expects the cement industry to benefit from the an anticipated US$2.2tn in new public infrastructure spending between 2025 and 2030. In a statement he said that ACC has crossed the 100Mt/yr cement capacity milestone in April 2025, propelling the company to get closer to its ambitious 140Mt/yr target by the 2028 financial year. The company’s capacity corresponds to 15 per cent of an all-India installed capacity of 686Mt/yr.

Image source:https://cementplantsupplier.com/cement-manufacturing/emerging-trends-in-cement-manufacturing-technology/

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