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Growing talent in the backyard

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Cement plants are usually located at odd locations, far from the comforts of city life. Acquiring and retaining talent is anyway a challenge at such remote places.
The acute shortage of capable hands to man the plants has worsened the situation further. It makes sense to upgrade skills of youth in the vicinity of a plant, then to depend on scarce talent inflow from urban locations. ACC, India?s largest cement manufacturer, took proactive approach to deal with this problem. Behram Sherdiwala, elaborates on two of the many initiatives taken by ACC to bridge the skill demand and supply gap.

ACC is also amongst India?s responsible corporates, which have taken persistent steps for knowledge building. One such significant contribution of ACC towards talent development is the establishment of ?Sumant Moolgaokar Technical Institute, Kymore,? popularly known as SMTI. With SMTI the company has not only satiated its own demand for industry ready workforce, but has also helped the community around it to become self-reliant.

Sumant Moolgaokar Technical Institute
Sumant Moolgaokar Technical Institute is one of the most prestigious institutes in India. It is a 50-year-old institution named in the honour of its founder the late Dr Sumant Moolgaokar. Initially this institute was known as The Kymore Engineering Institute, which was established in 1957. It was formed with the objective of training young men in specialised trades to become artisans, foreman and first line supervisors to meet the needs of the company. Training at SMTI is valued and perceived as being superior to the training provided at various Industrial Training Institutes (ITIs) in the country.

ACC has established schools across all its locations, wherein children from both the surrounding communities and its employees are provided quality education.

Management of these schools is outsourced to reputed educationists like the DAV or the best locally available institution, thereby ensuring that the schools maintain high standards of education.

Kymore is a town in Katni district in Madhya Pradesh, basically a remote area where modern infrastructure is far away from the domicile of its residents. In an attempt to support young talent and drive employability in Kymore, ACC provided SMTI with technical, infrastructural as well as faculty support under the aegis of ACC Knowledge Management. ACC?s plants are located across India in such remote areas, so the company?s efforts are focused towards enhancing these communities.

SMTI offers courses in electrical engineering, instrumentation, diesel and fitting trades in cement plants. These courses focus on building niche skills required to manage and run cement plants at artisan level. Once the course is completed, selected candidates join ACC as technicians. ACC hires about 100 people every year from this institute. This is one of the finest initiatives taken by ACC, which helps to improve the employ?ability of youth and provide them a platform to upgrade their skills.

SMTI has a distinguished track record of producing more than 3000 artisans and foreman trainees who have put in valuable service in ACC and other cement plants in India and abroad. Most of the students are kin of employees, workers and members of the local community around ACC cement plants. This institute welcomes candidates initially as students sourced through an open competition. The one-year course includes six months of on-the-job training at any one of the cement plants. The curriculum is continually updated to incorporate technological advancements and is taught by engineers with considerable experience in ACC or by experts in the field of technical education. Today the students coming out from SMTI have huge demand from other cement plants.

ITI Development
Another initiative taken by ACC is in strengthening of Industrial Training Institutes in the country. India has huge talent potential, most of which is unexplored. This potential is invariably associated with the performance of industries across sectors; the industrial sector being one of them. To bridge the gap between growing demands of the industrial sector and efficiency of the knowledge system, the Indian government entered into a public private partnership to form Industrial Training Institutes, commonly known as ITIs.

Many big corporates have been involved in the transformation and upgradation of these institutes over the past few years. In an attempt to strengthen the vocational training system in the cement industry, ACC entered into the PPP model with 7 state governments of India for providing infrastructural, financial and faculty support. These ITIs are located near ACC plants in the remote areas, which are:

  • Jamul, Chhattisgarh
  • Bundi, Rajasthan
  • Wadi, Karnataka
  • Chaibasa, Jharkhand
  • Bargarh, Orissa
  • Bilaspur, Chhattisgarh, and
  • Gagal, Himachal Pradesh.

Under this scheme ACC helps ITIs to obtain interest free refundable loan from the government up to Rs 25 million. ACC?s management committee for each institute, consisting of representatives from industry, ITI and government, has been vested with necessary authority to:

  • Make development plan for the institute
  • Assess emerging skills and suggest changes to the curriculum
  • Bring in new trades
  • Facilitate placement for ITI trainees
  • Appoint faculties as per the
  • need, and Generate, retain and utilise revenue.

Today, there are about 6000 ITIs across the country, training artisans, electricians and other technicians. A very small number of these centres is being upgraded presently. It is a slow but a gradual process, which will soon widen the prospects of industrial training in India.

SUMANT MOOLGAOKAR (1906-1989)
Dr Sumant Moolgaokar was born in Mumbai on March 5, 1906. He took his B.Sc (Hons), degree in engineering from the City & Guilds (Imperial College), London, in 1929 and began his career in the cement industry as an engineer at the C P Cement Works in 1930. Having seven years of hands on experience in three cement plants, he joined ACC (Associated Cement Companies, at that time), on its formation in 1938.

In 1944, he took charge of production and expansion activities of the group of eleven companies of ACC. He pioneered heavy engineering equipment production in India. Dr Moolgaokar undertook the production of heavy cement machinery in a factory set up for the purpose at Shahabad in Hyderabad state. The factory produced heavy cement machinery such as the kiln, grinding mills, crushers and ancillary equipment.

In 1949, he was appointed a Director of Tata Industries, ACC, the Cement Agencies, and the Director-in-Charge of Tata Locomotive and Engineering Co. He was also a member of the National Planning Council of the Planning Commission, Chairman of the Engineering Capacity and Survey Committee, Government Housing Factory and Machine Tools Development Committee. In recognition of his valuable contribution to production engineering in India, the Institute of Production Engineers awarded him the Sir Walter Puckey Prize in 1967. In February 1970, he was made an Honorary Life Member of the Indian Institute of Engineers. In December 1983, he was conferred Honorary Fellowship of Imperial College of Science & Technology, London.

Dr Moolgaokar strongly believed that to build an industry, you must first build a talented workforce to support it. He was able to foresee that as the nation moves towards industrialisation, it would need specially trained minds. He was instrumental in setting up the Engineering Research Centre, the Machine Tool and the Press Tool Division. He enjoyed bringing out best in the youth by giving challenging assignments and seeing them learn from them.

Behram Sherdiwala
President – Human Resources ACC
ACC?s plants are located across India in remote areas, so the company?s efforts are focused towards enhancing these communities.

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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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