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Economy & Market

“Industry is saving considerably on storage & transportation cost”

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Ashish K Nainan, Research Analyst – Industry Research, CARE Ratings

GST has come into existence nearly a year back. How do you review GST and changes made in GST on Cement and downstream products over the last one year?
The sector has benefited from the way GST has infused efficiency in terms of logistics and warehousing which has helped the industry save both time and costs.

The changes are yet to take place for the larger cement industry in terms of the tax-slab and incidence of GST on cement (at 28 per cent vs expectation of 18 per cent). But the industry has been buoyed by the demand from infrastructure and affordable housing. The renewed demand has seemed to ward of some of the challenges of GST. Interestingly, the Government has been instrumental in creating the renewed demand because of their focus on infrastructure and real-estate development.

What has been the impact of GST on cement and its other downstream products on the industry and users at present? Do you think GST process has stabilised by now?
Cement (Portland, slag, aluminous, etc.) falls under the highest tax bracket, i.e, 28 per cent. Other cement products used in industry like refractory cement, cement-based particle boards, etc. are taxed at 18 per cent. Cement is a majorly demand driven product coming from real estate and infrastructure segments and these two segments constitute for over 90 per cent of the total demand. Bringing all cement and its by-products under the same tax slab (at 18 per cent) would be favourable for the industry and would augur well for growth, thereby also helping in creating employment.

Real estate and infrastructure are significant in supporting growth of the economy, and are major employment generators in our economy. The present NDA government too has been focused on providing stimulus to infrastructure and real estate. Tax slab rejig would be considered a positive and enabling step from the government.

What are the benefits that have accrued to the industry – particularly intangibles like doing away with paperwork, transparency, speeding up logistics, etc.
One of the major benefits has been ease in movement or transportation of cement across States. There have been considerable cost savings w.r.t. the number of warehouses these companies have to maintain. Now, a cement manufacturer could maintain one large warehouse in one of the States, which would serve as a hub, and continue to supply the surrounding region from this hub which would include markets in the neighbouring States. Given the significance of transportation and storage costs which at times is as high as 25 per cent in the overall cost for cement manufacturers, the industry has been able to save considerably on storage and transportation cost due to GST. Paperwork too has eased and there are expectations of it easing further once the E-way bill processes get stabilised over the next six to nine months for the industry.
How GST has impacted the building materials industry, most of which has been in the unorganised sector as far as tax compliance was concerned?
It would be difficult to comment on building materials industry as a whole. Cement, steel are highly organised given the nature of the industry. On the other hand, ceramics, granite, marbles, etc. continue to have a sizable proportion of unorganised players. Paints is another industry which has a sizable number of unorganised players (approximately 35 per cent).

Tax compliance is not a choice anymore. They will have to be compliant if they want to cater to institutions like EPC companies, real-estate developers and government agency since these companies need to avail input tax credit. Interestingly, GST has brought awareness among retail consumers too. It is hence a matter of time, before majority of these industries become organised and become tax compliant.

What percentage of building material suppliers ecosystem has come under tax net after GST and its impact on prices generally?
Difficult to comment. Cement and steel like I mentioned is completely organised. Paints and glass used in construction too are majorly organised. Ceramics was about 45-50 per cent organised. This segment would witness a larger number of companies becoming formal, due to the segment they cater to. Their consumers will have to procure from GST-compliant companies in order to avail input tax credit.

Marble and granite industry too would follow trends in ceramic industry. Products with granite and marble industry are taxed at two separate tax slabs (18 per cent and 28 per cent). Bringing them under same tax slab would increase compliance and would also improve the ease-of-filing for these companies.

To what extent construction industry – building and infrastructure – is able to avail the input credit benefits and set-off their tax commitments? Is there any general estimate on the percentage of benefit claimed by them?
The modalities and incidence of inverted duty structure in some of the infrastructure segments especially in EPC contracts is still being discussed and resolved. Thus, specific data on input credits is awaited.

Broadly, the incidence of GST on infrastructure sector has been higher at 18 per cent than the previous tax regime (approximately 12-16 per cent). But input tax credit offers the much needed respite bringing down the overall tax incidence. Issues related to inverted tax structure in EPC contracts and ease in refunds need to be streamlined. These are some of the major hurdles or issues. Yet to come across any insight on input tax credits and overall tax incidence.

What is the general impact of GST on cement and building materials on their product prices and their end-products – building and infrastructure costs?
Prices of cement are driven by regional capacity utilisation and demand-supply scenario. The demand-supply has improved but are far lower from their historic highs in terms of capacity utilisation which has kept the prices subdued. GST has not had a major impact on the prices of cement. Th e prices have remained range bound post GST even though there were expectations of increase in prices.

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Economy & Market

Hindalco Buys US Speciality Alumina Firm for $125 Million

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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.

 

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Concrete

Shree Cement reports 2025 financial year results

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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/

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Concrete

Rekha Onteddu to become director at Sagar Cements

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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/

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