Economy & Market

Subdued demand hits cement cos

Published

11 years ago

May 31, 2015

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Indian cement industry hit a slowdown in the beginning of this year as cement production was down by 0.5 per cent in the Jan-March 2015 period. Cement price also came under pressure due to weak demand.

Due to weak demand from end-user segment, the nationwide cement demand remained sluggish. Cement price also came under pressure due top the weak demand.

Cement demand remains subdued due to weak demand from end user indusries Cement demand has remained sluggish in Q4 FY15 which is traditionally a seasonally strong quarter for the cement industry. All-India cement production declined by 0.5% YoY during Jan-Mar 2015 as against an increase of 9.7% during Apr-Sept 2014. While pre-election spending and delayed monsoon had supported the growth in cement demand in H1 FY15, the growth slowed down in H2 FY15 once the election cycle was over. Cement demand was also impacted by cut down in government spending in Q4 FY15, muted demand from real estate and construction projects and slow recovery in infrastructure spending. Further, decline in kharif crops production owing to poor monsoons affected agricultural incomes and post-monsoon rural demand for cement for housing and other purposes. Regional factors such as extension of monsoon in South, extremely cold weather in North India and unseasonal rains in North in Q4 FY15 also affected construction activities and consequently cement demand in some areas. The demand has showed no signs of recovery in April 2015 with cement production declining by 2.4% YoY during the month.

Significant slowdown in fresh capacity addition in FY17 to aid improvement in capacity utilisation
The industry has seen slowdown in addition of new capacities due to supply glut faced in recent times. For instance, between FY11-FY15, the industry added 92 MTPA cement capacities as against 122 MTPA in the preceding 4-year period FY07-FY11. However, slowdown in demand (cement production grew by 6.0% during FY11-FY15 as against 7.6% during FY07-FY11) resulted in decline in capacity utilization from 77% in FY12 to 72% in FY14 despite slowdown in fresh capacity addition. Going forward, we expect the industry to add 28 MTPA capacities during FY16-FY17- 21 MTPA in FY16 and 8 MTPA in FY17 as against the peak addition of 50 MTPA in FY10. Eastern region will lead the capacity expansion and is expected to witness about 12 MTPA capacity additions during FY16-FY17.

Southern region, which had witnessed the highest capacity addition in the last five years, will see a considerable slowdown adding only 6 MTPA of capacity addition in the next 2 years. Assuming a demand growth of 7% over the next two years, the incremental demand will be 19-20 MTPA, which will just match the incremental supply in FY16 resulting in stable capacity utilization vis-a-vis previous year. However, with slowdown in new project execution in FY17, the all-India cement capacity utilisation is likely to improve to 75% in FY17.

Prices come under pressure due to weak demand1

North: Cement companies in North raised prices by Rs. 20/bag in Jan 2015 ahead of the busy season in anticipation of recovery in demand. However, they were unable to sustain these hikes due to weak demand and unseasonal rains. For example, average wholesale cement prices in Chandigarh increased from Rs. 264/bag in Dec 2014 to Rs. 285/bag in Jan 2015 but declined to Rs. 276/bag in Feb 2015 due to subdued demand. Cement companies again raised prices by Rs. 10-15/bag in the month of Mar 2015 but prices corrected by Rs. 20/bag in May 2015. Cement prices in North have slid below last year?s prices.
West: Western region, particularly Maharashtra has seen a steep decline in prices. Average wholesale prices in Mumbai have declined to Rs. 285/bag from their peak level of Rs. 364/bag in Jan 2015. Prices in Ahmedabad have also declined by Rs. 15-20.bag due to weak demand.
East: The average wholesale prices in Kolkata market remained in the range of Rs. 340-360/ bag during FY15 and have increased to Rs. 363/bag in May 2015.
South: Cement companies took a major price hike in Dec 2014 to pass on the rising costs. For example, in the Hyderabad market, cement prices rose sharply by Rs. 60/bag MoM to Rs. 350/bag in Jan 2015. While there has been some disruption in pricing discipline in May 2015, the prices continue to be significantly higher on a YoY basis.

Q4 FY15 revenue growth remains modest due to weak demand; South based companies report healthy profitability in Q4 FY15
Most cement companies in ICRA Sample2 reported either a decline or a modest YoY increase in revenues in Q4 FY15. Only two companies, namely OCL India Limited and JK Cement Limited registered a double-digit YoY revenue growth due to volumetric growth aided by capacity expansion. The revenues of companies in ICRA sample registered mere 0.6% YoY growth. On a sequential basis, all companies reported an increase in revenues with revenues for ICRA Sample increasing by 9.0% QoQ in Q4 FY15.

The profitability margins of most cement companies declined on a YoY basis (except for South based companies). Despite this, the operating margins of ICRA Sample increased by 100 basis points to 19.2% n Q4 FY15 driven by performance of South based cement companies as well as ACC Limited. The operating profitability margins of South based companies namely, The Ramco Cements Limited and The India Cements Limited improved significantly both on a sequential and YoY basis due to significant hike in cement prices in South in Dec 2014. Cement companies in North had witnessed healthy profitability margins in Q4 FY14 driven by shutdown of 6MTPA capacity of Binani cement Limited and subsequent increase in cement prices in the region. As a result, on a YoY basis, the profitability margins in North (JK Cement Limited, JK Lakshmi Cement Limited, shree Cement Limited) came under pressure in Q4 FY15.

1Source for region-wise price data: CMIE
2ICRA Sample Includes ACC Limited, Ambuja Cements Limited, OCL India Limited, Shree Cement Limited, Ultratech cement Limited, JK Cement Limited, JK Lakshmi Cement Limited, Prism Cement Limited, the India Cements Limited, The Ramco Cements Limited

By Sabyasachi Majumdar, Sr.VP, Co-head, Corporate Sector Ratings, ICRA Ltd

Exhibit 3: Revenues and Profitability of Key Cement Players (Q4 FY15)
	Revenue (Rs. Billion)	YoY Revenue Growth	QoQ Revenue Growth	Operating Profits (Rs. Billion)			Operating Profitability Margin (%)
	Q4 FY15	%	%	Q4 FY14	Q4 FY15	Q3 FY15	Q4 FY14	Q4 FY15	Q3 FY15
ACC Limited	30.8	1.8%	8.6%	4.25	6.09	2.57	14.0%	19.8%	9.1%
Ambuja Cements Limited	24.6	-7.1%	2.4%	5.89	5.10	3.58	22.2%	20.7%	14.9%
JK Cement Limited	9.2	10.0%	14.7%	1.63	1.64	1.01	19.6%	17.9%	12.6%
JK Lakshmi Cement Limited	5.8	-10.8%	4.0%	1.12	0.71	0.75	17.3%	12.4%	13.6%
OCL India Limited	6.7	24.4%	22.2%	0.92	1.01	0.87	17.2%	15.2%	16.0%
Prism Cement Limited	15.3	0.4%	14.3%	1.19	0.84	0.37	7.8%	5.5%	2.7%
Shree Cement Limited	15.8	-5.3%	2.1%	4.31	3.41	3.06	25.9%	21.6%	19.8%
The India Cements Limited	10.4	-7.3%	0.3%	1.19	2.00	1.63	10.6%	19.2%	15.7%
The Ramco Cements Limited	10.0	1.2%	22.2%	1.29	2.74	1.30	13.1%	27.5%	15.9%
Ultratech Cement Limited	62.1	4.3%	10.9%	12.71	13.10	9.57	21.3%	21.1%	17.1%
TOTAL (ICRA Sample)	190.6	0.6%	9.0%	34.50	36.65	24.71	18.2%	19.2%	14.1%
Source: Financial Results of Companies, ICRA92s estimates

Concrete

Wonder Cement appoints Mahesh Singh as VP Corporate Brand Communication

Published

2 days ago

October 9, 2026

admin

Singh brings 20+ years of brand and marketing experience, and will lead integrated corporate brand communication initiatives at Wonder Cement

New Delhi

Wonder Cement, a leading cement manufacturer, has appointed Mahesh Singh as Vice President – Corporate Brand Communication. In his new role, he will oversee corporate brand strategy and communication, including digital and performance marketing, public relations, trade, events, exhibitions, sports and experiential marketing.

Singh brings over two decades of experience across marketing and communications, with roles spanning the automotive industry, agencies and entrepreneurship. He spent more than a decade with Honda Motorcycle & Scooter India, working across integrated communication, media, digital, retail and consumer engagement. His stint also included helping build the company’s digital marketing capabilities.

He moved to dentsu X India as Vice President – Strategy & Planning, working across categories such as automotive, auto components, electric vehicles, FMCG, consumer electronics, BFSI, apparel and brand consulting. His responsibilities included media and marketing strategy, product launches, content, performance marketing and consumer activations.

Singh subsequently took an entrepreneurial route with Radiant Brands before joining Shriram Ltd (SPR Autotech) as Head – Marketing & Communications. There, his remit included brand and corporate strategy, communications, PR and ORM, retail identity, loyalty programmes and events.

At Wonder Cement, Singh will be responsible for bringing together the company’s corporate brand communication initiatives across digital, performance marketing, PR, trade, sports and experiential platforms. The role will focus on creating an integrated approach to communication across consumers, trade partners and other key stakeholders.

The appointment brings to Wonder Cement a marketer whose career has spanned the brand, agency and entrepreneurial sides of the communications ecosystem.

Wonder Cement, part of the RK Group, is a cement manufacturer with roots in Rajasthan and a focus on quality, trust and transparency. The company has grown to six manufacturing plants, and a cement capacity of 21.5 MTPA. With more than 2,000 employees and a network of over 5,000 dealers, its operations span manufacturing, distribution and customer engagement, with a focus on consistent product quality and efficient execution.

Concrete

JSW Cement commissions additional 1 MTPA grinding unit at Nagaur

Published

3 days ago

October 8, 2026

admin

With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA,
Mumbai

JSW Cement, one of India’s leading green cement producers and part of the diversified JSW Group, today announced the successful commissioning of an additional 1.00 MTPA cement grinding unit at Nagaur, Rajasthan. The commissioning marks another significant milestone in the Company’s growth strategy.

With this commissioning, JSW Cement’s total cement grinding capacity has increased to 25.10 MTPA, while its total clinker manufacturing capacity, including clinker capacity at its joint venture, JSW Cement FZC, stands at 9.74 MTPA.

JSW Cement had commenced operations in North India in March 2026 with the Nagaur Integrated Plant, comprising a 3.30 MTPA clinkerisation unit and 2.50 MTPA cement grinding unit. With the commissioning of the additional 1.00 MTPA cement grinding unit, the plant’s total cement grinding capacity has increased to 3.50 MTPA, enhancing the company’s ability to cater to the growing cement demand across Rajasthan, Haryana, Punjab and the National Capital Region (NCR). The expansion has been funded through a strategic mix of equity and long-term debt.

During the quarter ended 30th September 2026, JSW Cement has also commissioned the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) at the Nagaur Integrated Plant.

Nilesh Narwekar, CEO, JSW Cement, said: “The commissioning of additional 1.00 MTPA grinding capacity at Nagaur is a key strategic priority for us and will accelerate JSW Cement’s expansion into North India. We look forward to servicing the growing needs of the region and contributing to the economic growth of Rajasthan, Haryana, Punjab and the NCR area. I am delighted to share that the company has commissioned this grinding unit within the expected timeline, showcasing our project execution capabilities. Further, the Alternate Fuel Handling System and the Waste Heat Recovery system (WHRS) are expected to substantially reduce our production costs going forward.”

Concrete

UltraTech becomes first Indian cement firm to cross 2 GW green energy

Published

4 days ago

October 7, 2026

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UltraTech Cement has crossed 2 GW of captive green energy capacity, with renewables and waste heat recovery meeting 48 per cent of its power needs.

Mumbai

UltraTech Cement Limited has surpassed 2 GW of installed green energy capacity for captive use, becoming the first cement company in India to achieve the milestone. The Aditya Birla Group company commissioned 116.55 MW of wind capacity at its Inter-State Transmission System-connected wind-solar hybrid project in Barmer, Rajasthan, along with 10 MW of Waste Heat Recovery System capacity at Sarlanagar Cement Works in Karnataka.

With these additions, UltraTech’s cumulative installed green energy capacity has reached 2,024 MW. This includes 1,580 MW of renewable energy capacity and 444 MW of waste heat recovery capacity, together meeting around 48 per cent of the company’s current power requirements.

The company said the milestone reflects the progress of its long-term energy transition strategy. In FY27 so far, nearly one-third of UltraTech’s 76 manufacturing units in India have maintained green energy utilisation above 50 per cent of their electricity requirements, while five units have crossed 95 per cent.

K C Jhanwar, Managing Director, UltraTech Cement Limited, said, “Crossing the 2 GW green energy milestone is the result of a strategy we have pursued consistently over the past decade. Cement is an energy-intensive, hard-to-abate sector, and showing that reliability and growth can go hand in hand with a rapid shift to green energy sets a benchmark for the industry. With nearly half of our power needs now met through green energy, we are significantly less exposed to fossil fuel supply constraints and power price volatility. As we scale up renewables, waste heat recovery and battery storage across our operations, we are building an energy foundation for stable, long-term growth.”

UltraTech commissioned 430 MW of green energy capacity in FY26 and continues to expand its renewable energy and waste heat recovery portfolio.

The company is also progressively integrating Battery Energy Storage Systems across its operations to improve renewable energy utilisation and supply reliability.

In 2025, UltraTech operationalised what it described as India’s first on-site hybrid round-the-clock renewable energy project at Sewagram Cement Works in Gujarat. The project combines solar, wind and battery storage.

As part of its decarbonisation strategy, UltraTech said it has not invested in new captive thermal power capacity for either greenfield projects or brownfield expansions at its integrated units for more than a decade.

The company said its expanding green energy portfolio is helping reduce dependence on conventional grid electricity and fossil fuel-based power, while lowering exposure to fluctuations in coal and electricity prices.

UltraTech aims to increase green energy’s share in its total power mix to 85 per cent by 2030. As a member of RE100, it has also committed to meeting 100 per cent of its electricity requirement through renewable sources by 2050.

UltraTech Cement, the cement flagship of the Aditya Birla Group, has a total grey cement capacity of 210.1 MTPA and white cement and putty capacity of 3.5 MTPA. The company is also a signatory to the GCCA Climate Ambition 2050 and has committed to the GCCA Net Zero Concrete roadmap.