ICR Lifetime Achievement Award 2018 recipients recall how the industry was in yesteryears before it reached the present growth pace and stature in the economy.
Amrit Lal Kapur, former Managing Director & CEO of Ambuja Cement and Kamal Chand Jain, popularly known as KC Jain, former whole time director of Kesoram Industries, the recipients of the Indian Cement Review (ICR) Lifetime Achievement Awards 2018 on December 21, 2018 in Hyderabad, traversed down the memory lane for giving an inkling into how the industry has taken several twists and turns to arrive at the present level of growth, sophistication and investment interest.
In his acceptance speech, Kapur narrated the challenges faced by the industry in 1980s – Cement shortage was steep and was being made good by imports, power shortage was endemic, capacity utilisation was low, and the way all these factors kept away investors from the cement sector.
KC Jain, who joined Kesoram Industries in 1966, had set up the first dry process cement plant in the country at Ramagundam near Hyderabad, after convincing his boss BK Birla, who had suggested him against taking high risk by adopting a technology that was not tested in India by then. ‘The success of that Kesoram’s plant was such it made everybody to go for dry process only later,’ Jain added. The Third Indian Cement Review Awards were presented to 12 awardees on December 21, 2018, at the 10th Cement Expo at Hyderabad, organised under the aegis of the First Construction Council (FCC), which is a non-profit trust engaging in researching information and ranking infrastructure and construction companies. Speaking on the selection process for the awards, Pratap Padode, Founder and President of FCC, said, ‘Today’s awards are a salutation to the industry and its performance. While we are here today, the work on these awards had begun much earlier. Those who have been awarded today have gone through a process that is completely above board, and that is pretty detailed. This is necessary for sustaining the credibility and integrity of any award process.’
New category, Sustainability Awards were introduced for the first time during the biennial award ceremony, and they were given away in four key areas – Transition risks, Physical risks, Transition opportunities, and climate governance and strategy. Kapur recalled that the industry had an installed capacity of about 23 million tonnes (MT) when Kapur entered the cement industry in 1979. From there it has reached 498 MT of installed capacity by November 2018.
GOVERNMENT CONTROL Kapur said, ‘The industry was under strict government control over production, distribution and prices. The system of price control was accompanied by trade pooling as a result of which cement was available at every corner of India at a uniform price. And even the escalations in the prices of the cement prices was decided by the government, which were sought after by the industry, but were granted very reluctantly.’
‘While experimenting with the economic liberalisation, the government introduced partial decontrol in 1982. A levy quota of 66.6 per cent was fixed for being sold to the government and the remaining whatever you could produce could be sent to the market at which a ceiling on the price was fixed so that they don’t charge the consumers exorbitantly,’ Kapur added.
The government subsequently introduced better investment policies favouring the industry and decided to move towards deregulation of the industry leading to total decontrol. Finally in 1989, the cement industry was considered to be prepared for the free market competition, and distribution controls on sale of cement was withdrawn, the system of trade pooling was totally abandoned. The cement industry was then de-licensed in 1991 under the policy of economic liberalisation by removing all controls, Kapur, who capped the pinnacle of his career as the managing director of Ambuja Cement in 2010, explained. That helped accelerate growth and induced further modernisation, expansion and investments in the cement industry.
Illustrating an ordeal in getting a bag of cement in 1960s, Kapur said that one had to get one’s cement requirement certified by an architect/civil engineer and then approach the civil supplies officer to get permit to show it to the cement company along with the demand draft for the specific quantity. Way back in mid-60s, I stood in queue in ACC’s office to get the clearance from the office to get delivery of cement at my house construction site, least realising then that I would be in the thick of cement industry some day later.
Taking a peek into the future, Kapur said that the industry has to brace up for disruptive innovations like it did with entry of mobile phones and big data, which has become the currency of business today.
DRY PROCESS LEADER
Jain was asked to set up a 2 lakh tonne cement plant for Kesoram Cement by BK Birla Group at Ramagundam near Hyderabad. After enquiries with cement technology leaders like ACC -Vickers-Babcock, Jain was convinced that dry process was the best suited for the new plant, though wet process was in vogue at that time. The reason: Dry process plant would consume only 20 per cent of coal, where as in wet process it was over 30 per cent. That is a huge saving. This decision boosted the career and stature of Jain in the then nascent industry.
Later, Kesoram Industries went into expansion, into Vasavadatta cement and then Birla gave him charge of Mangalam Cement as its managing director. With the thought of retirement in mind, when Jain met Birla about 15 years back, Birla told me, ‘You are only 62, I am in 80. You work in the company as long as you keep good health. And I will tell you, that makes me run 5 km everyday to maintain my health. Even today I am working in Mangalam Cement,’ Jain explained.
‘Today we are at 12.5 million tonnes capacity, all latest plants. Our Vasavadatta plant is considered to be the latest plant (in terms of technology). One must always think of going for the latest technology, techniques and environmentally friendly plants,’ Jain advised the industry veterans and the new breed of managers at the ceremony.
Citation of AL Kapur
As a pioneering leader with rich experience in all facets of the cement industry, Mr. AL Kapur, you are an industry icon who has been instrumental in bringing about major transformations in the sector. During your three-decade stint in the cement industry, and nearly five decades of industrial experience, you have successfully led Birla Corporation as Executive Director & CEO, ACC as a whole-time Director, Cement Corporation of India as a whole-time Director (Finance), as well as numerous other industrial bodies to unprecedented levels of success. You have been an inspiration to thousands in the industry, and have motivated the next generation to strive beyond excellence.
We would like to congratulate you on the enormity of your success.
Best Wishes, Indian Cement Review
Citation of KC JAIN Personifying the virtue of hard work and motivation, Mr. KC Jain, you have served your community for five decades, in an unwavering and outstanding manner. Right from your historic successes at Basantnagar in 1969, your various contributions to the cement industry through Kesoram and Vasavadatta Cement, you have made ‘service above self’ your motto, and inspired thousands to strive beyond excellence. Mr. Jain, by setting up hospitals in Basantnagar and Karimnagar, and providing assistance to farmers and villagers in Andhra Pradesh, you have proved to be a revered humanitarian, and true gem for our country.
We would like to congratulate you on the enormity of your success and goodwill. Best Wishes, Indian Cement Review
– BS SRINIVASALU REDDY