Economy & Market

Bulking up

Published

7 years ago

March 31, 2018

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More and more RMC players and project implementing agencies are opting for bulk deliveries against split bags to save on costs and to curtail wastage.
Bulk distribution of cement is slowly but steadily replacing the once ubiquitous cement bags, changing the composition of cement channel supply chains forever. Bulk cement is consumed by ready mix concrete (RMC) manufacturers and project implementing agencies across the country. However, bag cement is refusing to disappear from the scene. For other activities like plastering, brickwork etc., bag cement is required, besides catering to the rural demand, where a lot of consumers order lower quantities.

"About 75% of requirements of RMC manufacturers are supplied through bulk only. The trend is building up towards bulk as wastage is low and cost is competitive. It saves on the cost of bags and wastage is less than one per cent. In the next couple of years, the trend will continue towards bulk," says AK Bal, Director of Pune-based Viraj Projects Pvt Ltd, which deals in steels, sand, dyes, bricks and tiles, besides cement.
Earlier the concept was use of split bags for even medium and big projects. But the trend is changing for several reasons. "Now, everybody has installed silos and has a big RMC plantat the site, particularly in South Mumbai, where you can see new towers coming up. They go for RMC orders, practically due to space constraints. This is the reason bulk cement has moved there, and this trend will continue," says Nikesh Parekh of Mumbai-based Span Cements, which also deals in paints, construction chemicals and tile adhesives.
For urban supplies and infrastructure projects, bulk supplies are being preferred, so demand for bulk supplies is expected to rise, says Bal, citing the example of Odisha, where bulk cement supplies were almost absent a year ago and gaining prominence of late.
Cement bag go into retail shops, who supply it to small contractors. "With the entry of specialised products like ready-made plasters, tile adhesives, mortars, polymer mortars etc., bag cement in retail will slowly diminish in future. In other developed countries, you do not get loose bag cements." Independent dealers
Few producers sell their goods directly to the final users. But, most use intermediaries to bring their products to market. The latter involves forging marketing channels, which can be described as a set of interdependent organizations that help make a product or service available for use or consumption by the consumer. Hence a company’s channel decisions will have a direct bearing on its marketing success.
There is an apprehension that some independent marketing players could takeover the building material channel operations wholesale in the days to come. There are already a couple of start-ups which are doing this in building materials. Nitin Vyas, Managing Director, Beumer Group says, "I believe that the next step for it would be having a platform for all cement-related industries to become an Uber (online call taxi service) of cement distribution. In the end, the cement producers would be containers, but the interface to the market would be the service companies who are reaching the material to the end customers. And that can’t be stopped."
Even some of the dealers have started guarding against this impending trend though it is not widely prevalent as of now. Span Cements has already started taking orders online from their customers. However, if online orders are accepted by any firm then they may seek payment in advance.
But for that there is no big change in the cement channels. The dealers opt for multiple dealerships for cement, so that they cannot disappoint any customer seeking a particular brand. Single dealerships are a rarity. Dealer-based
Cement is a pure commodity. Most of the cement manufacturers still deal with customers through distributors or dealers. "Though the companies are maintaining accounts of some key customers, the supplies are routed through dealers and distributors. Companies never supply cement directly to anybody. They want to encourage distributors also for insuring their receivables. The companies want to get their payment on time, so dealer will be in between to take care of payments," says Bal of Viraj.
"We have virtually become insurance agent for our principal (manufacturer for their receivables) than a marketing agent, and financier for our customer," Parekh says while explaining the role of cement dealers in the supply chain. For steel sector it is different – there customer pay interest for delayed payment. In steel, direct supply system from manufacturers is still prevalent. As far as sand goes, they have to make the spot payment, because natural sand is a very scarce commodity today. Whatever available is manufactured sand.
Comparing the channels between cement and steel, Bal says, "Another difference is cement has to be consumed within three months from the date of manufacture, hence some dealers push it through credit. That is not the case with steel, which can be stored for a couple of years without erosion in quality, if properly stored."
There is a general consensus among the dealers ICR has contacted about the upward trend in cement prices in the coming months, mostly banking on the pre-election infrastructure boost that will take place in the next 12 months before general elections scheduled for May 2019.
Bal of Viraj is expecting the cement prices to go up to Rs 270 plus GST per bag in the next two quarters from the present level of 230 plus GST in Pune. Even builders are trying to complete their projects at the earliest to cash in on their land banks. The reason is that earlier the building prices were going up rapidly giving hope that the builders can make more money if the project is delayed. Now, there is no such hope. "Now the rise in building/floor price is only 4-5 per cent a year, which is not sustainable if the project is delayed as it does not even cover the incremental interest cost incurred. Besides, input prices are moving up," Bal added.
If there is any hindrance to cement demand growth that is ‘availability of finance’, particularly in the wake of the government swooping down on defaulting companies and bad loans. "Financing has become tight everywhere. We (as dealers) have a certain capacity and I cannot go beyond that or else I will also fall. If any builder calls me and tells me that I can only pay you only a couple of weeks later, I will have to accept it. Otherwise they will stop taking my supplies. As far as payments to companies are concerned, we work on one principle – RTGS in 48 hours."– BS Srinivasalu Reddy

Concrete

Lohia Corp Expands Global Footprint With Acquisitionof J.j. Jenkins Inc and Strategic Joint Venture With Omgm

Published

1 month ago

October 22, 2024

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Lohia Corp Limited (LCL) is pleased to announce two significant milestones that mark our
expansion in the global market.

We have successfully acquired J.J. Jenkins Inc. a respected name in machine manufacturing for
high-tech industries, through our US subsidiary, Leesona Corp, a 130-year-old pioneer in winding
machines. This acquisition aligns perfectly with our strategic vision to expand our specialty yarns
and tapes portfolio in medical and defence applications.

In addition, we have formed a strategic Joint Venture with Italy’s O.M.G.M. sas, leading to the
creation of OMGM Extrusiontechnik Srl. With LCL holding the majority stake. This JV represents
a significant diversification of our product portfolio, introducing solutions in Extrusion and
Winding systems for a variety of technical applications.

These advancements are not just about growth; they’re about bringing cutting-edge solutions to
our customers and contributing to industries that make a difference. Stay tuned for more updates
as we continue to push the boundaries of technology and engineering excellence.

Mr. R K Lohia, Chairman & Managing Director of Lohia Corp Limited, expressed his enthusiasm
about the new ventures “Both these new partnerships are a pivotal move that will broaden our
product offerings and provide our customers with even more choices and will enhance our
presence in the North America and European market, at the same time strengthen our presence
in all other global markets.”

About Lohia Corp Limited
Lohia Corp Limited (LCL) stands as a testament to the power of innovation and commitment to
excellence. As the flagship company of the Lohia Group, LCL has established itself as a global
leader in providing comprehensive solutions for the raffia industry.

With an impressive installation base of over 2,250 extrusion lines and 95,000 Circular Looms
across more than 100 countries, LCL’s influence in the plastic woven fabric and bag sector is
unparalleled. The company’s dedication to quality and efficiency has resulted in an astounding
plastic processing capacity of 7.7 million metric tons per annum of PP & PE.

LCL’s products, ranging from packaging systems for solid bulk materials to roof underlays and
tarpaulins, are not just industrial applications; they are the building blocks of industries
worldwide.

The company’s commitment to sustainability and innovation is the driving force that makes it the
world’s largest producer of machines for the raffia sector. As we look to the future, LCL’s legacy
of excellence is more than just a benchmark; it is a continuous journey towards pushing the
boundaries of possibility.

About J. J. Jenkins, Inc
J. J. Jenkins Inc. is a very respected name based out of North Carolina, USA. They remain at the
forefront of the synthetic fiber and monofilament industries. Their unwavering commitment to
innovation, quality, and customer satisfaction has not only set industry standards but also
fostered enduring partnerships with Fortune 500 companies including some in the medical and
defence industries.

Their holistic approach, combining state-of-the-art technology with unparalleled after-sales
support, exemplifies their dedication to client success. With a vast inventory ensuring rapid
response times, J. J. Jenkins, Inc. is synonymous with reliability and efficiency.

About OMGM sas
Since 1965, OMGM sas is a distinguished Italian leader and has been at the forefront of the plastic
processing industry, pioneering in Monofilament Extrusion, straps, ropes and various other niche
applications. Their commitment to excellence is evident in their advanced technologies and
versatile extrusion lines, handling a variety of materials for diverse industries.

As we look ahead, it’s clear that OMGM Extrusiontechnik Srl will continue to lead and transform
the industry with their precision, innovation, and bespoke solutions. They are more than a
company; they are a trusted partner in progress.

Concrete

Adani acquires Orient Cement at INR 8,100 crore equity value

Published

1 month ago

October 22, 2024

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Acquisition adds 16.6 MTPA capacity (8.5 MTPA operational, 8.1 MTPA Ready to Execute).

Accelerates Ambuja’s journey to achieve 100+ MTPA operational capacity in FY 25

Provides 6 MTPA potential additional capacity in North India, leveraging OCL’s high quality limestone reserves in Rajasthan

EDITOR’S SYNOPSIS

Ambuja enters into a binding agreement to acquire 46.8% stake in Orient Cement Ltd (OCL). The acquisition helps to move towards target capacity of 140 MTPA by 2028.
OCL has an existing 5.6 MTPA clinker and 8.5 MTPA cement operational capacity, 95 MW CPP, 10 MW WHRS, 33 MW Renewable Energy spread across the states of Telangana, Karnataka and Maharashtra. It improves Adani Group’s market share pan-India by 2% in the cement industry.
OCL has secured a concession from Madhya Pradesh Power Generating Company Ltd (“MPPGCL”) to set up 2.0 MTPA Cement GU within the premises of Satpura Thermal Power Station in Sarni, MP.
OCL also has a large high quality limestone mining lease in Chittorgarh, Rajasthan, providing the potential to set up additional 6 MTPA capacity in North India.
The acquisition of OCL complements Ambuja’s existing cement footprint, reducing overall lead distances and logistics costs for the cement business and improving market share in our core markets.
Acquisition will be funded through internal accruals, Ambuja remains debt free.

Ahmedabad, 22 October 2024: Ambuja Cements, the cement and building material company of Adani Cement and part of the diversified Adani Group, today announced the signing of a binding agreement for the acquisition of Orient Cement Ltd (OCL) at an equity value of Rs. 8,100 crore. Ambuja will acquire 46.8% shares of OCL from its current promoters and certain public shareholders. The acquisition will be fully funded through internal accruals.

“This timed acquisition marks another significant step forward in Ambuja Cements’ accelerated growth journey, increasing cement capacity by ~30 MTPA within two years of Ambuja’s acquisition,” said Mr Karan Adani, Director of Ambuja Cements. “By acquiring OCL, Ambuja is poised to reach 100 MTPA cement capacity in FY 25. The acquisition will help to expand Adani Cement’s presence in core markets and improve its pan-India market share by 2%. OCL’s assets are highly efficient, equipped with railway sidings and well supported by captive power plants, renewable energy, WHRS and AFR facilities. OCL’s strategic locations, high-quality limestone reserves and requisite statutory approvals present an opportunity to increase cement capacity in the near term to 16.6 MTPA.”

Mr CK Birla, Chairman of Orient Cement and the CK Birla Group, said, “The CK Birla Group is continuously reallocating capital to sharpen its focus on consumer centric, technology driven and service-based businesses. I take pride in Orient Cement’s impressive track record of building premium brands and maintaining a leading market share in the geographies it operates in. We are confident that the Adani Group, with its strong focus on cement and infrastructure, is the ideal new owner to drive continued growth at Orient Cement for our people and stakeholders”.

Ms Amita Birla, Co-Chairman, CK Birla Group, added, “Orient Cement has a strong market presence, with sustainability initiatives, particularly in renewable energy, being a significant part of its DNA. I am convinced that Ambuja Cements is the right home for all our colleagues at Orient Cement, as well as our customers.”

OCL has 5.6 MTPA clinker capacity and 8.5 MTPA cement capacity along with statutory clearance to increase the clinker capacity by another 6.0 MTPA and cement capacity by another 8.1 MTPA. In addition, OCL also has a limestone mining lease in Chittorgarh for setting up an Integrated Unit (IU) with clinker of 4 MTPA and a split Grinding Unit (GU) of 6 MTPA in North India. OCL has also secured a concession from MPPGCL, Madhya Pradesh for setting up a Grinding Unit within the premises of Satpura Thermal Power Plant. Both these complement the Adani Group’s existing cement footprint. (Refer Annexure – 1 for OCL’s location wise cement capacity and other assets and Annexure – 2 for Adani Cement’s footprint post-acquisition of OCL.)

OCL has recently commissioned a WHRS in Chittapur IU and is in the final stage of commissioning 16 MW solar in Chittapur and 3.7 MW solar in Jalgaon. OCL’s efficient plants, highly motivated teams, strong balance sheet and well-distributed dealer network will be excellent additions to the Adani Group’s existing cement business. OCL’s existing dealers will move to Adani Cement’s market network, creating formidable synergies.

Ambuja plans to optimize OCL’s overall capacity utilization to enhance its cost and competitiveness and improve its operating performance while leveraging the synergies inherent in the existing cement business.

About Ambuja Cements Ltd (ACL)

Ambuja Cements Ltd is one of India’s leading cement companies and a member of the diversified Adani Group – the largest and fastest growing portfolio of diversified sustainable businesses. Ambuja, with its subsidiaries ACC Ltd, Penna Cement Industries Ltd and Sanghi Industries Ltd, has taken the Adani Group’s cement capacity to 88.9 MTPA, with 20 integrated cement manufacturing plants, 20 cement grinding units and 12 bulk terminals across the country. Ambuja has been recognized among ‘India’s Most Trusted Cement Brand’ by TRA Research in its Brand Trust Report, 2024 and among ‘Iconic Brands of India’ by The Economic Times. Ambuja has provided hassle-free, home-building solutions with its unique sustainable development projects and environment-friendly practices since it started operations. The company has many firsts to its credit – a captive port with six terminals that facilitates timely, cost-effective and cleaner shipments of bulk cement to its customers. Its innovative products like Ambuja Cement, Ambuja Plus, Ambuja Compocem and Ambuja Kawach are now listed in the GRIHA product catalogue. These products not only fulfil important customer needs but also help in significantly reducing their carbon footprints. Being a frontrunner in sustainable business practices, Ambuja Cements ranks among ‘India’s Top 50 companies contributing to inclusive growth’ by SKOCH and ‘India’s Top 50 Most Sustainable Companies’ Cross-Industry by BW Businessworld.

For further information on this release, please contact: roy.paul@adani.com

Annexure -1 | Existing Cement Assets of Orient Cement Limited

Plant	Clinker (MTPA)	Cement (MTPA)	CPP/WHRS/Solar	Railway Siding
Devapur IU, Telangana	3.5	3.5	CPP – 50 MW	Yes
Chittapur IU, Karnataka	2.1	3.0	CPP – 45 MW WHRS – 10 MW Solar – 16 MW*	Yes
Jalgaon GU, Maharashtra	–	2.0	Solar – 13.5 MW+ 3.7 MW*	Yes
Operational Capacity	5.6	8.5

* capacity is in commissioning stage

Annexure – 2 | Footprint of Adani Group – Cement business post OCL Acquisition

Economy & Market

Fornnax Announces a Major Launch With Sr Max Series: Sr-max2500 Primary Shredder a Revolutionary and Game-changer

Published

1 month ago

October 18, 2024

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Fornnax, a renowned shredding and recycling equipment provider with years of experience in designing and developing SR-Series dual shaft shredders, has unveiled its advanced level SR-MAX2500 shredder specially designed for the Municipal Solid Waste category.

The launch was held IFAT India 2024, a most prestigious event in the waste management industry, on October 16th, 2024, at the Bombay Exhibition Centre in Mumbai.

Fornnax’s successful track record of developing many proven machines for different types of tires, ferrous and non-ferrous metals, which are the most difficult applications has made them a pioneer in the shredding and recycling equipment manufacturing global market over the decade now. The design of the SR-Series machine, a legacy that has prevailed for over a decade, continues to be used in the design of SR-MAX series machines. The advanced SR-MAX2500 shredder features high capacity, modern engineering, and innovative technology.

The remarkable event was inaugurated by Mr Ulhas Parlikar, Ex-Director of Geocycle India; Mr Sanjay Shripatrao Katkar IAS (Municipal Commissioner and Administrator) MBMC; Mr Sharad Nanegaonkar Executive Engineer (Water Supply and Sewerage Department) MBMC; Mr Deepak Khambit (City Engineer) MBMC; Mr Jignesh Kundaria CEO & Director of Fornnax Technology Pvt. Ltd.;

Mr Manoj Kumar Sure, JK Cement Head AFR; Mr Manoj Kumar Modha, Director of Millennium Multi Trade Pvt. Ltd.

Jignesh Kundaria, CEO and Director of Fornnax, shared insights into their newly launched innovation, “With the SR-MAX2500, we’re poised to transform the waste management landscape in India and beyond. Our goal is to line up municipal waste recycling industries with a robust, efficient, and sustainable solution. Our commitment to sustainability and enhancing recycling process is a step forward towards achieving PM’s vision of a Net Zero emissions future by 2050.”

Revolutionizing Waste Reduction: The SR-MAX2500 Advantage We’re excited to introduce the Fornnax SR-MAX2500, a revolutionary primary shredder designed for efficient volume reduction of diverse materials. This high-capacity machine boasts advanced modern engineering and technology, featuring hydraulic motors driving each shaft for optimal power and torque. Its unique cutter design, replaceable cutting table, and shaft design make it an ideal solution for various applications.

Waste Management Reimagined! SR-MAX2500 Primary Applications Our primary focus for the SR-MAX2500 is serving large-scale municipal waste recyclers, cement plants, waste-to-energy plants, mechanical biological treatment facilities, materials recovery centres, construction and demolition recyclers, aluminium recyclers, and other applications requiring highcapacity machines and robust technology.

The SR-MAX2500’s Impressive ROI Streak The SR-MAX2500 offers several commercial benefits, including increased efficiency, reduced operational costs, and enhanced productivity as it is specially designed for the Indian market. Its robust design and advanced technology ensure minimal downtime, maximizing profitability for our customers. Additionally, our commitment to quality and reliability helps build long-term relationships with clients, fostering loyalty and repeat business.

Innovation Meets Efficiency: Why Choose the SR-MAX2500? Fornnax has carved out a distinctive niche in the highly competitive market and its relevance stems from a unique, tailored approach that addresses specific needs. Thus, the SR-MAX2500 shredder differentiates itself through its versatility, catering to a diverse array of waste management and user needs, specifically designed for Indian waste, which is highly contaminated compared to global waste. Additionally, our unwavering focus on innovation, quality, and customer-centricity sets us apart from competitors and establishes our position in the market.

Turning Trash into Treasure with MSW Waste As you see due to the rapid urbanization and over population, India is among the world’s top 10 countries generating municipal solid waste (MSW) and generates around 62 million tons of waste in a year. Therefore, it is extremely critical to prioritize recycling and conversion of MSW into RDF fuel. Cement industry, which uses a significant amount of coal. Cement industries substituting coal with RDF or alternate fuel to reduce the greenhouse gas emissions, conserve natural resources like coal and more and ultimately minimise the waste disposal issues.

Fornnax’s Exceptional Contribution to India’s Sustainability Goals India has made significant strides in waste management and recycling, and with continued investment, innovation, and policy support, there’s no doubt it can achieve its goals. Fornnax is committed to contributing to India’s sustainability and waste management journey through their advanced recycling solutions, supporting the country’s transition to a more circular and environmentally conscious economy.

Fornnax’s Unwavering Commitment to R&D and Innovative Solutions Fornnax stays updated with global advancements in recycling technology and sustainability practices through several key strategies, such as we invest heavily in research and development to ensure our equipment are at the forefront of technological innovation. Our team closely monitors industry trends, emerging technologies, and regulatory changes to identify potential opportunities for improvement. We also actively seek feedbacks from our valued clients to understand their evolving needs and challenges. This input helps us identify areas where we can boost our meet market demands.

Expanding Horizons: Fornnax’s Growth Plans for the Year Ahead The SR-MAX2500 launch is a strategic step towards expanding our market presence and strengthening our position as a leading shredder manufacturer around the globe.

Also, we are optimistic about the coming year, driven by the growing demand for sustainable waste management solutions and the increasing awareness of environmental issues. We are actively investing in equipment enhancement, engineering, and strengthening our partnerships to meet the evolving needs of our customers. Fornnax’s focus areas for the next year include expanding the manufacturing capacity to meet the rising demand and we already started working on it by acquiring 23-acre land parcel in Ahmedabad, Gujarat. The new site is expected to become operational by March 2025. Its focus will be on producing high-capacity machinery applicable in tyre, cable recycling, ewaste, metal processing and more.

About Fornnax FORNNAX is one of the world’s leading shredding and recycling equipment manufacturers, offering Primary shredders, Secondary shredders and Granulators for tyres, municipal solid waste, cables, e-waste, aluminium and many other industrial applications. Quick after-sales services that increase our customer’s uptime and productivity.

We are committed to shaping the landscape for sustainable recycling solutions in the future. Because we’re not just selling equipment, we’re building business. That’s what we believe. That’s who we are. Fornnax Equipment is built with the idea that the simple, most significant and heaviest is better. Our equipment is an evolution of advanced products designed for the challenges of the recycling world.

The global sales partner network makes us successful worldwide. Our corporate culture is based on our history of providing value to our customers’ success worldwide. This motivates our employees to work together, develop innovative products, and produce high-quality equipment.