Concrete

Base effect hides monthly decline

Published

5 years ago

October 19, 2021

admin

Steel and cement sector witnessed a growth of 59.3 per cent and 7.9 per cent (YoY) respectively, which reflects the capex push provided by the Central and State governments. The decline in case of cement and steel production is mainly due to impact of the record surge in Covid-19 cases in May 2021 and the associated lockdowns on construction activity.

The Eight core sector should be read with caution again as the favourable base effect is again at play for the third consecutive month. In May 2021, core sector output rose by 16.8 per cent as against a contraction of 21.4 per cent in May 2020. On a month on month level comparison, there has been a marginal decline of 3.7 per cent which reflects the impact of the second wave of the Covid-19 pandemic and the associated lockdowns on business activities. One should note that May has been characterised by lockdowns of varied nature in both FY21 and FY22. The localised lockdowns during May??1 did have a bearing on output of the 8-core sector to some extent while the double-digit growth can be chiefly ascribed to the low growth number in May??020. There has been an upward revision in the core sector growth data for April??1 to 60.9 per cent (previous estimate: 56 per cent).

The double-digit Y-O-Y growth has been primarily driven strong growth registered in steel, natural gas and refinery products. Month-on-month improvement has been registered in case of fertilisers (ahead of kharif season), natural gas and coal production. The monthly index for May??1 is still 6.1 per cent lower than the pre-pandemic index of February??0 and 8.2 per cent lower than May??019 (the year prior to the pandemic). So far in FY22, the core sector output has witnessed a growth of 35.8 per cent compared with a de-growth of 29.4 per cent in the corresponding month last year but this purely a baseeffect phenomenon. There could be support from government capex as the fiscal numbers for this period show higher outlay on roads.

Key highlights

Coal production was higher by 6.9 per cent in May 2021 as against -14.1 per cent in May 2021. Despite the 2nd wave of the COVID19 pandemic disrupting business activities during the month, there has been a month-on-month improvement of 3.1 per cent in coal production on the back of revival in demand from the power sector.

Crude oil production fell by 6.3 per cent in May 2021, registering the 42nd consecutive monthly decline. The decline in production can be ascribed to adverse climatic conditions created by cyclone Tauktae, which hit the Indian west coast coupled with less than planned contribution from workover wells, drilling wells and old wells. The overall production has also been lower owing to lower consumer demand, infectivity issues in few wells, workovers and water knockouts.

Natural gas production rose by 20.1 per cent in May??021 compared with contraction of 16.7 per cent in May??020 mainly due to higher output from the PSC fields. However, production in government fields were low due to reduced gas production in Western Offshore due to cyclone Taukate, delay in commencement of gas production and less offtake by consumers due to Covid-19 issues. Natural gas production by Pvt/JVs companies in the PSC (production sharing contracts) regime has almost tripled on a YoY basis. This is due to increased contributions from D-34 field of KG DWN 98/3 and wells from satellite cluster.

Refinery production rose by 15.3 per cent in May??1 as against a de-growth of 21.3 per cent in May??020. There has however been a month-on-month decline of 4.6 per cent reflective of lower consumer demand amidst the localised lockdowns during the 2nd wave of the Covid-19 pandemic. Products that witnessed a rise in production were high speed diesel, petrol, liquefied petroleum gas, aviation turbine fuel and petcoke, while fuel oil and kerosene saw a fall in output during this month.

Fertiliser production declined to a 14-month low of 9.6 per cent in May 2021 compared with a high base of 7.5 per cent in May 2020. The m-o-m growth of 16.1 per cent can be ascribed fertilizer manufacturing companies increasing their production in May over April in anticipation of good demand ahead of the kharif sowing season. Along with this, the Centre increased the subsidy on fertilizers in mid-May after fertilizer producers announced their plans of increasing prices due to a surge in international feedstock prices. This hike in subsidies assuaged manufacturers??worries around a fall in demand from farmers. This is likely to have supported production too.

Steel and cement registered a growth of 59.3 per cent and 7.9 per cent (YoY) respectively which does reflect the capex push provided by the governments at both Centre and State level along with a low base effect. The m-o-m decline in case of cement and steel production highlights the impact of the record surge in Covid-19 cases in May 2021 and the associated lockdowns on construction activity. Labour shortages due to reverse migration also had a bearing on construction activities during May??021.

Electricity generation rose by 7.3 per cent in May 2021 as against a low base of 14.8 per cent in May 2020. However, there has been a month-on-month decline of 7.1 per cent as states imposed lockdowns to rein in the devastating effect of the second wave of the Covid-19 pandemic. The higher usage of electricity in residential locations during the summer season limited the monthly moderation to some extent.

CARE Ratings??View

There has been a dip in the core sector index for May??021 compared with the previous month which reflects the impact of the localised lockdowns on business activity. However, as economic activities, especially in the industrial segment were not significantly affected in June 2021, output of the core sector will witness an improvement. There has been a strong push for capex from the Government which will drive steel and cement while the advent of the kharif season will drive fertilizer production. The impact of the base-effect will continue in the next few months but will fade away subsequently. The IIP for the month of May??021 could range between 20-30 per cent though one should not read much into it.

Courtesy: CARE Ratings

ABOUT THE AUTHOR:

The article is authored by Sushant Hede, Associate Economist. He can be contacted on: Email: sushant.hede@careratings.com | Tel: 91-22-6837 4348

Disclaimer: This report is prepared by CARE Ratings Limited. CARE Ratings has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Ratings is not responsible for any errors or omissions in analysis / inferences / views or for results obtained from the use of information contained in this report and especially states that CARE Ratings has no financial liability whatsoever to the user of this report.

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Concrete

UltraTech becomes first Indian cement firm to cross 2 GW green energy

Published

1 hour ago

October 7, 2026

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UltraTech Cement has crossed 2 GW of captive green energy capacity, with renewables and waste heat recovery meeting 48 per cent of its power needs.

Mumbai

UltraTech Cement Limited has surpassed 2 GW of installed green energy capacity for captive use, becoming the first cement company in India to achieve the milestone. The Aditya Birla Group company commissioned 116.55 MW of wind capacity at its Inter-State Transmission System-connected wind-solar hybrid project in Barmer, Rajasthan, along with 10 MW of Waste Heat Recovery System capacity at Sarlanagar Cement Works in Karnataka.

With these additions, UltraTech’s cumulative installed green energy capacity has reached 2,024 MW. This includes 1,580 MW of renewable energy capacity and 444 MW of waste heat recovery capacity, together meeting around 48 per cent of the company’s current power requirements.

The company said the milestone reflects the progress of its long-term energy transition strategy. In FY27 so far, nearly one-third of UltraTech’s 76 manufacturing units in India have maintained green energy utilisation above 50 per cent of their electricity requirements, while five units have crossed 95 per cent.

K C Jhanwar, Managing Director, UltraTech Cement Limited, said, “Crossing the 2 GW green energy milestone is the result of a strategy we have pursued consistently over the past decade. Cement is an energy-intensive, hard-to-abate sector, and showing that reliability and growth can go hand in hand with a rapid shift to green energy sets a benchmark for the industry. With nearly half of our power needs now met through green energy, we are significantly less exposed to fossil fuel supply constraints and power price volatility. As we scale up renewables, waste heat recovery and battery storage across our operations, we are building an energy foundation for stable, long-term growth.”

UltraTech commissioned 430 MW of green energy capacity in FY26 and continues to expand its renewable energy and waste heat recovery portfolio.

The company is also progressively integrating Battery Energy Storage Systems across its operations to improve renewable energy utilisation and supply reliability.

In 2025, UltraTech operationalised what it described as India’s first on-site hybrid round-the-clock renewable energy project at Sewagram Cement Works in Gujarat. The project combines solar, wind and battery storage.

As part of its decarbonisation strategy, UltraTech said it has not invested in new captive thermal power capacity for either greenfield projects or brownfield expansions at its integrated units for more than a decade.

The company said its expanding green energy portfolio is helping reduce dependence on conventional grid electricity and fossil fuel-based power, while lowering exposure to fluctuations in coal and electricity prices.

UltraTech aims to increase green energy’s share in its total power mix to 85 per cent by 2030. As a member of RE100, it has also committed to meeting 100 per cent of its electricity requirement through renewable sources by 2050.

UltraTech Cement, the cement flagship of the Aditya Birla Group, has a total grey cement capacity of 210.1 MTPA and white cement and putty capacity of 3.5 MTPA. The company is also a signatory to the GCCA Climate Ambition 2050 and has committed to the GCCA Net Zero Concrete roadmap.

Concrete

Shiva Cement Merges with JSW Cement

Published

4 hours ago

October 7, 2026

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JSW Cement has announced a scheme of arrangement to merge its listed subsidiary Shiva Cement with itself, creating a single unified cement platform. The boards of both companies have approved the proposal, which will require clearances from stock exchanges, the Securities and Exchange Board of India, the National Company Law Tribunal, Odisha Industrial Infrastructure Development Corporation and other applicable authorities.

The transaction is expected to be completed within 12 to 14 months, subject to the necessary approvals from regulators, shareholders and creditors. Under the scheme, JSW Cement will issue 5 equity shares with a face value of Rs. 10 each for every 41 equity shares with a face value of Rs. 2 each held by Shiva Cement shareholders other than JSW Cement.

The company said the merger would consolidate financial, managerial, technical, distribution and marketing resources while reducing administrative duplication and compliance requirements. It would also provide greater funding flexibility, potentially lower financing costs and eliminate inter-company guarantees.

The consolidation is expected to strengthen backward integration by enabling JSW Cement to use Shiva Cement’s clinker manufacturing facility. This would reduce dependence on external clinker procurement and improve supply-chain efficiency. Public shareholders of Shiva Cement would receive direct ownership in JSW Cement, which has a broader institutional investor base and a more liquid listed presence.

JSW Cement acquired a controlling stake in Shiva Cement through transactions that began in January 2017. Shiva Cement operates a clinker facility in Odisha, near the borders of Odisha, Chhattisgarh and Jharkhand, and commissioned a 1 mtpa cement grinding unit at Sambalpur in FY26 through a commercial arrangement with Bhushan Power and Steel.

JSW Cement has 24.10 mtpa of cement grinding capacity and 9.74 mtpa of clinkerisation capacity. Its Indian operations comprise nine plants, including two integrated units, one clinker unit and six grinding units. The proposed merger is intended to simplify the corporate structure and align the financial statements of the two companies.

Concrete

UltraTech’s Kukurdih unit runs fully on green energy

The Chhattisgarh plant has met 100 per cent of its electricity needs through green energy since April 2026.

Published

6 days ago

October 1, 2026

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UltraTech Cement’s Kukurdih Cement Works in Chhattisgarh has met 100 per cent of its electricity requirement through green energy every month since April 2026. Commissioned in 2024, the integrated cement manufacturing unit has an installed grey cement capacity of 3.3 million tonnes per annum.

The plant meets its electricity requirement through a combination of renewable power sourcing and Waste Heat Recovery Systems (WHRS). UltraTech said the combination enables the unit to meet its power needs through green energy while maintaining operational reliability.

Since April 2026, nearly a third of UltraTech’s 76 manufacturing units in India have maintained green energy utilisation above 50 per cent of their electricity requirement. Five units, including Kukurdih, have exceeded 95 per cent green energy utilisation.

The company is also progressively deploying Battery Energy Storage Systems (BESS) across its manufacturing network to support greater integration of renewable energy. UltraTech said it has not invested in new captive thermal power capacity at its integrated units, including greenfield projects and brownfield expansions, for more than 10 years.

As of Q1FY27, UltraTech’s captive green energy capacity stood at 1,897 MW, comprising 1,463 MW of renewable capacity from solar, wind and hybrid sources, and 434 MW of WHRS capacity.

Under its RE100 commitment, the company aims to increase the share of green power in its total power mix to 85 per cent by 2030 and 100 per cent by 2050.