K Ravi, Managing Director, NCL IndustriesHaving started as a mini cement plant with a modest capacity of 200 tonne per day (66000 tpd) the NCL Cement Division has gone through several rounds of expansion. K Ravi, Managing Director, NCL Industries, talks to ICR about the USP of the company, steps taken for maintaining quality and how the power holiday is creating a profound impact on the industries in Andhra Pradesh.What are your views on the current scenario of the cement industry? The cement industry in India has grown substantially as cement is one of the major elements in construction work. Though majority of the players in cement industry in India are from private sector, the industry is highly regulated. The consumption of cement has also increased gradually in recent times, by over 8 per cent. Demand for cement from the southern part of the country is high, as there have been more real estate and construction activities in that region. The lack of rain this year has allowed construction companies to continue working as usual and this has pushed up demand for cement by more than 10 per cent all over India in the months of October, November and December 2012. However, in the south, even though there is a potential for growth and some more companies (both existing and new) are planning to set up their new units in the coming years, at present there seems to be a mismatch between demand and supply. Consequently, the present cement prices are not favourable for the industry. We feel that the cement industry will play a crucial role in both infrastructure and housing in the near future.By the end of the year 2012, the price of cements in various states dropped drastically, your forecast on 2013?Yes, the price of cement in various states did drop during the last quarter. However, the latest market reports indicate that there has been a slight improvement in pricing on account of the recent diesel price hike. Since the construction activity will be normally at peak levels from now onwards up to June/July, the cement industry is likely to post better performance in the next two quarters. How do you plan to keep in pace with the latest technologies at your cement plant? NCL Industries are always on the lookout for adopting modern technologies in their processing units. Recent Capacity Expansion was completely done using latest technological improvements like Vertical Roller Mills for raw materials and fuel grinding, online sampling equipment, Stack Monitoring and Gas analysers, RABH for preventing dust emission. Latest pendulum no spillage clinker cooler is installed for better heat recuperation. The company has adopted their standards at higher levels for all the products being manufactured i.e, cement, cement bonded particle boards and ready mix concrete.
What is the USP of the cement produced by your company? Quality’ and wide spread retail dealer network (more than 1500 dealers) are the main strengths for our cement.How important is location while setting up a cement plant?Considering the nature of materials to be handled in manufacturing cement, the location should be a balancing act between market and raw materials. Keeping this in view, most of the cement manufacturing companies are operating from split locations. Clinker, which is a semi finished product stage of cement, will be manufactured at the prime location or main factory which will be closer to major raw material sources. Clinker grinding plants are being set up at various locations which will be closer to the market. With this approach, instead of transporting entire cement to the market, only clinker will be transported which will be normally 60 to 70 per cent of any blended cements (PPC / Slag). Thus, substantial transport cost savings can be achieved. ‘What are the measures taken by the company to maintain the standards of the quality of cement produced?A well equipped laboratory is established with X-ray analyser and Sample Preparation equipment where the product i.e, cement is analysed from the first stage of manufacturing to finishing stage, i.e., at every intermittent level to maintain consistent quality and standards. At present, the cement division of NCL Industries is producing different grades of cement like 43 Grade, 53 Grade, 53 Grade S for railways and PPC.How has the power holiday in Andhra Pradesh affected your business?The prevailing situation in Andhra Pradesh (AP). is different as compared to other southern states and rest of India. Drastic power cuts and lack of sufficient coal supplies have badly affected industries in AP. (except those industries having captive power plants). Keeping this in view, we are proposing to set up a 30 mw captive thermal power plant with a capital outlay of app. Rs 150 crores and the financial closure for the project is under final stages of progress.What are the greatest challenges faced by the cement industry today? Cement industry faced many challenges since its inception. These challenges include pricing, Government policies on taxation, demand and supply mismatch/gap, competition, takeover threats and amalgamations, etc. The growth of the cement industry is directly proportional to the growth of the country’s economy, and the current economic slowdown has negatively affected the cement industry. Bank funding has become costlier, and this has affected expansion plans of many companies. Lack of coal is the one of the major hindrances, how do you combat the same. As observed rightly, currently, one of the main problems is that the cement industry is facing lack of sufficient coal supplies at right point of time at reasonable rates. The industry is now dependant on imported coal procured at high costs. This results in erosion of margins.Does the company have any plans of expanding to other markets and what is the strategy behind operating only in AP?As far as cement business is concerned, we are expanding our dealer network in other states such as Karnataka, Tamil Nadu, Kerala, Orissa and Maharashtra (as of now, we have more than 300 retail dealers in these states). Whereas, our cement boards, with the brand name ‘Bison Panel,’ are marketed throughout India. What is the company doing to envisage its retail visibility?We are keeping the Stock Exchanges informed with the developments taking place in the company. We are doing Analysts meets etc as and when there are some significant happenings and sharing the information with the stock analysts. Alot of cement companies have been blamed for malpractices in the industry, what is your take on it?No comments on this as NCL is no way is connected in this.