Concrete

The Curious Business of Concrete

Published

8 years ago

January 2, 2019

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If cement was not a global business but a regional business at best, then concrete (or ready mixed concrete, RMC, as one may call the concrete business in some parlances) business can at best be called local, in terms of geographical spread. Some have attempted to use glorified jargons such as "glocal" etc., in respect of cement, to signify its globalisation in the areas of technology and sustainability, but in case of RMC, even such coined adjectives are not applied. Even so, there is sense in looking at the global scenario of ready mixed concrete business, simply because the global trends, and the global learnings, particularly those from Europe and North America provide a window into what may happen in emerging markets like ours, as our construction markets mature, and as our construction practices advance.

But, before we do that, a small introduction of "concrete" itself will be in order. We have always tried to remind our readers that the value chain is cement – concrete- construction, and that if cement is a construction material, then concrete is a construction intermediate. To introduce concrete to the lay person, one may say that the grey powder-like product that we know as cement is but one ingredient, albeit an important one, for making concrete mix. To quote volubly from the report entitled ‘Global Concrete Report 2018, published by Global Cement Magazine:

‘Cement is the main ‘active’ ingredient in a concrete mix, which, when combined with water recrystallises into a hard matrix which solidifies around the other constituents, binding them together. Cement makes up around 15-20 per cent of the weight of the ingredients, which also include water, sand and aggregate. Other ingredients may include special chemicals that delay or accelerate setting, that impart higher early strength or reduced heat of hydration, or which increase the flowability of the unset concrete. Other ingredients may include inert fillers such as ground limestone, or cementitiously-active alternative materials such as ground-granulated blast furnace slag, silica fume, rice husk ash or flyash. Each cubic metre of concrete weighs around 2,400 kg, and includes 350 kg of cement (140 kg/t), 700 kg of sand (280 kg/t), 1,200 kg of aggregate (480 kg/t) and 150 kg of water (60 kg/t).’ This gives us an idea that, clearly, concrete is not just cement, but many other things indeed!

Here are a few conclusions that one can draw from the same report:
Top 25 RMC companies in the world produced 388 million cubic metres of concrete in 2017, which was a mere 10 per cent of the global output. This tells us that the business is local in nature, and is fragmented, if we analyse market-by-market.

There are only two Indian Concrete Businesses figuring in this top 25, namely UltraTech Concrete at seventh, and ACC Concrete at 21st positions. This is an apparent anomaly, given that India is by far the second largest cement producing nation in the world, and this reflects the situation of the Indian construction market – the fact that it is unorganised, non-automated, retail and fragmented.

The list of top 25 has just a few concrete companies, which are not backed by cement manufacturing ventures, and the few that make the grade are in USA, and have aggregate supplies integrated into them. In fact, the top 10 concrete companies are all subsidiaries of bigger cement set-ups. This tells us some things about downstream integration strategies and evolution of cement delivery channels as markets mature.

In India, while the ready-mix concrete market has still a long way to go, we already find instances of cement companies integrating downstream into concrete delivery businesses, as also construction companies finding it useful to integrated upstream into RMC outfits. I am sure that many of these enterprises are discovering the truism that even if the overall value chain is profitable, individual components of that chain may be value- destroying.

Sumit Banerjee Chairman, Editorial Advisory Board

Concrete

Cement Makers’ Margins To Fall Rs 50-75 Per Tonne Amid West Asia Conflict

Crisil Sees Margins Easing Despite Steady Demand

Published

18 hours ago

July 29, 2026

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Crisil said operating margins of Indian cement manufacturers are expected to decline by Rs 50-75 per tonne (t) this fiscal to Rs 925-950 per t due to higher input costs triggered by the West Asia conflict. The analysis covered 18 cement companies accounting for nearly 90 per cent of India’s domestic cement capacity and noted margins had improved sharply to around Rs 1,000 per t in fiscal 2026.

Crisil noted that the reduction would be driven mainly by higher power and fuel costs, which account for about 30 per cent of total costs, as petcoke and imported coal prices have surged amid geopolitical uncertainties. Freight costs, which account for about a quarter of total costs, are also expected to remain elevated because of higher diesel prices. The impact on profitability is likely to be more pronounced in the first half of the fiscal year before easing commodity prices moderate cost pressures later.

The rating agency said steady domestic demand and strong balance sheets should keep credit profiles stable despite the moderation in margins. Green energy currently accounts for 35-40 per cent of the sector’s total electricity consumption and is expected to partly cushion higher energy costs. Operating cash flows are likely to remain resilient, supported by projected 6-7 per cent growth in cement demand this fiscal.

Crisil highlighted that demand growth will be driven primarily by infrastructure spending, which meets about one-third of sector consumption, and by a nearly 18 per cent higher budgetary allocation for core ministries that should support project execution. Weaker rural housing demand amid pressure on agricultural incomes from a possible below-average monsoon may be offset by improved urban housing demand supported by favourable home-loan rates and a strong pipeline of Pradhan Mantri Awas Yojana-Urban projects. Ongoing capacity additions will keep capital expenditure elevated and may lift net debt to EBITDA to between 1.2 and 1.4 times from around 1.0 time last fiscal, though ratios are expected to remain healthy.

Concrete

UltraTech Board Approves Rs 50 bn Fundraise Via NCDs

Company to issue half a million debentures for expansion plan

Published

2 days ago

July 28, 2026

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UltraTech Cement’s board of directors has approved raising Rs 5,000 crore (Rs 50 bn) through non?convertible debentures issued in rupees.

The finance committee cleared a proposal to issue up to 500,000 fully paid, unsecured, listed, rated, redeemable, rupee?denominated, non?convertible, non?cumulative debentures of Rs 1 lakh each (Rs 0.1 mn each), aggregating to the Rs 5,000 crore programme.

As of June 2026 the firm reported net debt of Rs 15,875 crore (Rs 158.75 bn) and said its capacity expansion projects under execution are backed by capital expenditure of about Rs 17,000 crore (Rs 170 bn) over the next two to two?and?a?half years.

UltraTech spent Rs 9,500 crore (Rs 95 bn) on capital expenditure in financial year 2026 and in April the group crossed 200.1 mn tonnes per annum of domestic grey cement capacity and 205.5 mn tonnes per annum of global capacity.

The chief financial officer indicated the company would take consolidated capacity beyond 242 mn tonnes per annum, with grey cement capacity reaching 212.7 mn tonnes per annum by the end of financial year 2027. He noted the net debt?to?earnings before interest, taxes, depreciation and amortisation ratio stood at 0.87 times as of June 2026 and the company was confident of ending financial year 2027 with the ratio below one time.

In the first quarter of financial year 2026?27 UltraTech’s net profit attributable to owners rose 16.8 per cent year?on?year to Rs 2,599.3 crore (Rs 25.993 bn) and revenue from operations increased 15.9 per cent to Rs 24,648.20 crore (Rs 246.482 bn). The board approval is expected to complement internal cash flows as the company advances its expansion programme.

Concrete

Lokesh Lays Stone For Rs 31 Billion Cement Unit In Kadapa

Line-2 expansion to make Kadapa a major cement hub

Published

1 week ago

July 20, 2026

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Andhra Pradesh Education and IT Minister Nara Lokesh on Wednesday laid the foundation stone for the Line-2 expansion of Dalmia Bharat Cement at Chinnakomerla village in Mylavaram Mandal in Kadapa district. The project carries an investment of Rs 31 billion (bn) and is slated for completion by the third quarter of the financial year 2028. The expansion is intended to boost industrial growth and employment generation across the Rayalaseema region.

Once commissioned, the Kadapa facility will become Dalmia Bharat’s largest integrated cement manufacturing ecosystem in southern India, creating over 1,000 direct and indirect jobs and opening new business avenues for regional micro, small and medium enterprises and transport operators. Lokesh said the expansion signalled growing corporate confidence in the state and reflected the practical ease of doing business that secured repeat investment.

He placed the project within the government’s wider economic targets and recalled the Yuvagalam padayatra commitment to generate two million (mn) jobs within five years, noting that the state would cultivate talent while industry created opportunities. Lokesh highlighted Andhra Pradesh’s competitive pursuit of major manufacturing accounts, mentioning past successes and a personal initiative to engage global investors when persuading them to anchor expansion in the state.

The plant will leverage Kadapa’s abundant limestone reserves to scale production and sustainability. Clinker capacity is planned to rise from two point five million tonnes per annum (mn tpa) to six point one mn tpa, while overall cement output will increase from three point six mn tpa to nine point six mn tpa. The unit is designed to operate on over eighty per cent renewable energy and deploy waste heat recovery, zero liquid discharge, water recycling and advanced AI systems to optimise efficiency. Industries Minister TG Bharat, BC Welfare Minister S. Savitha and Jammalamadugu MLA C. Adinarayana Reddy attended the ceremony.