Connect with us

Economy & Market

Cement is bucking the trend

Published

on

Shares

India’s GDP growth rates are consistently falling every quarter through calendar 2018, and the forecast for the fourth quarter of FY19 is a further drop. Mint says that eight of the 16 high-frequency macroeconomic indicators are in the red and only four in green, (indicating that) the Indian economy continues to remain weak. The Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of December 2018 stood at 133.7, which is a measly 2.4 per cent growth as compared to the level in the month of December 2017. This shows that manufacturing sector is still limping along. The Centre for Monitoring of Indian Economy (CMIE), a much respected think tank, reported that 11 million jobs were lost in 2018 alone. India’s jobless rate shot up to 45-year high during 2017-2018, according to a report of National Sample Survey Organisation (NSSO). NSSO, an autonomous government institution, which is much acclaimed globally for its statistical expertise, showed unemployment rate at 6.1 per cent, the highest since 1972-73. Accordingly, all agencies have watered down growth forecasts for the last quarter, as well as for the full year 2018-19, to varying degrees. Among highly divergent data and views being expressed on the realty sector (one of the largest consumers of cement), one thing emerges as a consensus: no silver linings visible yet in the sector, other than perhaps the introduction of our first ever Real Estate Investment Trust (REIT). In fact, the first month of 2019 saw growth in the eight core sectors of the economy crash to a 19-month low at 1.8 per cent, slipping below even the dismal 2.8 per cent growth recorded in December 2018.

But it is not all gloom and doom, at least not for the cement industry. It continues to outshine its many of its core sector cousins, having trotted up a highly impressive 11 per cent growth year on year for the month of January 2019. And this showing comes back to back with a very good despatch growth numbers notched up in the previous month as well. Analysts and observers of the sector are projecting a very healthy 10 per cent growth for the cement industry in FY 19, as against 8.5 per cent last financial year (which also happened to be on an anaemic low base). The forecast for 2019-20 is now around 7 per cent on the higher base, and one can easily see that these pleasing numbers, caused mostly due to pre-election spends and infrastructure boost from the central as well as state governments, would result in higher capacity utilisation. Inspired by the immediate and the medium term prospects, many cement companies have increased prices significantly. Some say prices have increased by Rs 25 per bag on an average, and some other reports talk about Rs 77 per bag! This price rise has in turn triggered angry reactions from some stakeholders, such as CREDAI, and some governments, among them the Andhra Pradesh State Government, are already responding in one way or the other, given that this matter could become sensitive with elections round the corner.

For the investor community, the price rises together with lower costs of energy/fuel, can only mean better margins for the sector, and therefore, all round ?buy? suggestions are coming up.

Sumit Banerjee Chairman, Editorial Advisory Board

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

on

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

on

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

on

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

    This will close in 0 seconds