Connect with us

Economy & Market

In the Long Run, we are all dead

Published

9 years ago

on

Shares

The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past, the ocean is flat again. This is what the eminent economist John Maynard Keynes had said which provides a context to the famous, oft-quoted and mostly misunderstood phrase, ?In the long run, we are all dead?. According to Prof Simon Taylor of the Cambridge University, and I quote him, Keynes is not arguing that we should recklessly enjoy the present and let the future go hang. Keynes was exasperated with the view of mainstream economists that the economy is an equilibrium system which will eventually return to a point of balance…

To me, this famous phrase stands for the classic aversion of people in power from articulating quantified goals for the medium term or even foreseeable long term, and the propensity of promising delivery of vague motherhood stuff in very very long term, which is meaningless, because by then, symbolically, we are all dead ? well, at least dead from waiting interminably. This tendency enables the leaders with authority, to conveniently avoid accountability to the unquestioning masses down the line. It is my belief that Keynes attacks this culture of abstract deliverables in the undefined long term; he abhors this absolute lack of accountability.

Yes, our context is demonetization. Cement industry, like most other sectors, is already affected by this huge government intervention. Dispatches have dwindled all over the country, and analysts are predicting a drop of 20 to 30 per cent in volumes in the current quarter. The big question is, what is going to happen after that. Housing and Real Estate are sectors where cash transactions have been traditionally predominant, and these are major drivers of cement demand. We also happen to know that two thirds of cement consumption is into individual house builder segment which likes to pay for its cement bags mostly in cash. All this knowledge makes us suspicious about the health of cement demand going forward, and needless to say, the stock market is equally skeptical as we see the cement stocks have been hammered down by 15 to 20 per cent So, obviously there is considerable short and medium term pain to be endured by the cement sector.

Back to Keynes now. We agree to endure short term pain, provided we are convinced about the long term gains in the foreseeable future, and if the long term gains are well-articulated and quantified, and someone is held accountable for delivering those gains. Otherwise, in the long run, we are all dead (meaning all this becomes irrelevant today). Have you noticed that no one has said anything so far about quantified long term gains of demonetization, barring mouthing generalities, while the short term pains are already a reality.

Let us look at some numbers now. A paltry 6 to 8 per cent of the black wealth is held as cash, the rest being held in the form of gold, forex, property and other offshore assets, according to statistics released from IT data. An even more paltry 0.023 per cent of cash in circulation is suspected to be counterfeit, according to government- commissioned studies. How much of this 6 per cent of black economy can we trap through this demonetization? I suspect a very insignificant fraction. Even if, optimistically speaking, we can isolate 20 per cent of this black cash, it will mean a negligible 1 per cent of our black wealth! According to the social media, there are at least 14 different well-publicized methods of converting black money into white and depositing the same into bonafide bank accounts through loopholes left wide open by the government. Out of 14 lakh crore of demonetized currency notes, 11 lakh crore would be in circulation, the rest being in the banking system at any given point of time. Of this, as we go to press, upwards of 7-8 lakh crores have been already safely deposited into banks, and it is likely that bulk of the remaining notes will come into the banks, all as white money, by the 30th December deadline. If that were to happen, one can well judge the efficacy of this drive, at least on the count of removing black money, which happens to be the?"raison d’etre"of this exercise. So much for the much-touted long term gains.

Be that as it may, let us wish that the cement industry bounces back soonest.

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Economy & Market

Hindalco Buys US Speciality Alumina Firm for $125 Million

Published

2 days ago

on

June 25, 2025

By

Shares

This strategic acquisition marks a significant investment in speciality alumina, a key step by Aditya Birla Group’s metals flagship towards becoming future-ready by scaling its high-value, technology-led materials portfolio.

Hindalco Industries, the world’s largest aluminium company by revenue and the metals flagship of the $28 billion Aditya Birla Group, has announced the acquisition of a 100 per cent equity stake in US-based AluChem Companies—a prominent manufacturer of speciality alumina—for an enterprise value of $125 million. The transaction will be executed through Aditya Holdings, a wholly owned subsidiary.

This acquisition represents a pivotal investment in speciality alumina and advances Hindalco’s strategy to expand its high-value, technology-led materials portfolio.

Hindalco’s speciality alumina business, a key pillar of its value-added strategy, has delivered consistent double-digit growth in recent years. It has emerged as a high-growth, high-margin vertical within the company’s portfolio. As speciality alumina finds expanding applications across electric mobility, semiconductors, and precision ceramics, the deal positions Hindalco further up the innovation curve, enabling next-generation alumina solutions and value-accretive growth.

Kumar Mangalam Birla, Chairman of Aditya Birla Group, called the acquisition an important step in their global strategy to build a leadership position in value-added, high-tech materials.

“Our strategic foray into the speciality alumina space will not only accelerate the development of future-ready, sustainable solutions but also open new pathways to pursue high-impact growth opportunities. By integrating advanced technologies into our value chain, we are reinforcing our commitment to self-reliance, import substitution, and building scale in innovation-led businesses.”

Ronald P Zapletal, Founder, AluChem Companies, said the partnership with Hindalco would provide AluChem the ability and capital to scale up faster and build scale in North America.

“AluChem will benefit from their world-class sustainability and safety standards and practices, access to integrated operations and a consistent, reliable raw material supply chain. Their ability to leverage R&D capabilities and a talented workforce adds tremendous value to our innovation pipeline, helping drive market expansion beyond North America.”

An Eye on the Future

The global speciality alumina market is projected to grow significantly, with rising demand for tailored solutions in sectors such as ceramics, electronics, aerospace, and medical applications. Hindalco currently operates 500,000 tonnes of speciality alumina capacity and aims to scale this up to 1 million tonnes by FY2030.

Commenting on the development, Satish Pai, Managing Director, Hindalco Industries, said the deal reinforced their commitment to innovation and global expansion.

“As alumina gains increasing relevance in critical and clean-tech sectors, AluChem’s advanced chemistry capabilities will significantly enhance our ability to serve these fast-evolving markets. Importantly, it deepens our high-value-added portfolio with differentiated products that drive profitability and strengthen our global competitiveness.”

AluChem adds a strong North American presence to Hindalco’s portfolio, with an annual capacity of 60,000 tonnes across three advanced manufacturing facilities in Ohio and Arkansas. The company is a long-standing supplier of ultra-low soda calcined and tabular alumina, materials prized for their thermal and mechanical stability and widely used in precision engineering and high-performance refractories.

Saurabh Khedekar, CEO of the Alumina Business at Hindalco Industries, said the acquisition unlocked immediate synergies, including market access and portfolio diversification.

“Hindalco plans to work with AluChem’s high performance technology solutions and scale up production of ultra-low soda alumina products to drive a larger global market share.”

The transaction is expected to close in the upcoming quarter, subject to customary closing conditions and regulatory approvals.

 

Continue Reading

Concrete

Shree Cement reports 2025 financial year results

Published

1 week ago

on

June 17, 2025

By

Shares

Shree Cement posted revenue of US$2.38 billion for FY2025, marking a 5.5 per cent decline year-on-year. Operating costs rose 2.9 per cent to US$2.17 billion, resulting in an EBITDA of US$528 million—down 12 per cent from the previous year. Net profit fell 50 per cent to US$141 million. The company reported cement sales of 9.84Mt in Q4 FY2025, a 3.3 per cent increase from 9.53Mt in Q4 FY2024, with premium products making up 16 per cent of total sales.

Image source:https://newsmantra.in/

Continue Reading

Concrete

Rekha Onteddu to become director at Sagar Cements

Published

1 week ago

on

June 17, 2025

By

Shares

Sagar Cements has announced the appointment of Rekha Onteddu as a non-executive independent director, effective 30 June 2025. According to People in Business News, Rekha Onteddu is currently serving in a similar capacity at Andhra Cements, the parent company of Sagar Cements.

Image source:https://sagarcements.in/

Continue Reading

Trending News

SUBSCRIBE TO THE NEWSLETTER

 

Don't miss out on valuable insights and opportunities to connect with like minded professionals.

 

    This will close in 0 seconds