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ACC Ltd plans to increase clinker capacity by 2.7 mtpa

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ACC plans to increase its focus on green and sustainable products

ACC Ltd plans to increase clinker capacity by 2.7 million tonne per annum (mtpa) and cement capacity by 4.8 mtpa.The company will also increase its focus on green and sustainable products.ACC, in its Annual Report, presented its plans and growth forecasts. It is working on different methods to scale up the sales. The company sales have increased by around 13% to 28.89 million tonnes (mt) Vs 25.53 mt YoY.India is among the top cement producers worldwide, with an estimated cumulative established capacity of 551 million Tonnes per annum in 2021.It is additionally the second-largest consumer of cement, though per capita cement consumption remains below the global average, leaving significant headroom for development.Cement demand increased by 11-13% YoY in CY 2021. Continuing demand for affordable housing in rural areas, surging demand in the urban builder segment, and government infrastructure spending will remain vital drivers for cement usage.Individual Home Builder and Ground+ Three Storey(G+3) are ACC’s largest customer segments. This strong network has moved about 79% of cement sales in the retail sector in CY 2021. Gold Water Shield (Water Repellent Cement) continues to be a market leader in the premium category.Image Source


Also read: ACC net profit Q3 FY22: 24% jump in net profit at Rs 450.21 crore

Concrete

Top Cement Companies Thrive Amid Weak Market

Strong players withstand low demand pressures

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Despite weak demand and intense competition in India’s cement sector, leading companies in the industry have managed to sustain growth in the second quarter (Q2) of the fiscal year, while smaller firms have struggled to maintain profitability. In an environment marked by low infrastructure activity and stiff competition, larger cement companies leveraged their scale and operational efficiencies to outperform their smaller counterparts.

Top cement players, including UltraTech Cement and Shree Cement, reported positive financial results due to their ability to optimize production costs and effectively manage distribution channels. These companies benefited from high levels of capacity utilization and strategically located plants that reduced transportation costs. Additionally, they were able to withstand rising input costs, like coal and fuel prices, better than smaller competitors.

On the other hand, mid-sized and smaller cement companies faced challenges in maintaining margins, impacted by the dual pressures of high input costs and low pricing power due to the competitive landscape. Many smaller players struggled with profitability, as they lacked the scale to offset rising operational expenses. As a result, some smaller firms saw a drop in market share, while the larger players have continued to consolidate their position in the industry.

Looking ahead, while market demand is expected to pick up with upcoming infrastructure projects and real estate developments, the intense competition is likely to persist. Industry analysts anticipate that smaller cement companies may continue to face challenges unless they can increase operational efficiencies or seek partnerships to achieve economies of scale.

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Concrete

Adani’s Ambuja Cements Plans Expansion Strategy

Ambuja Cements targets 140 million-tonne capacity.

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Ambuja Cements, a subsidiary of the Adani Group, is actively pursuing an expansion strategy focused on acquisitions to bolster its production capacity to 140 million tonnes. This move is part of a broader ambition to strengthen its position within the cement industry and enhance its market share across various regional markets.

The company’s growth plans include identifying and acquiring complementary businesses that can enhance its production capabilities and operational efficiency. With the increasing demand for cement driven by ongoing infrastructure development projects in India, Ambuja Cements aims to capitalize on this momentum through strategic investments.

Adani’s emphasis on sustainability is expected to play a critical role in this expansion. The company is committed to adhering to high environmental standards, ensuring that its operations contribute positively to the community while minimizing the ecological footprint. This focus on innovation and sustainable practices will not only improve profitability but also position Ambuja as a leader in responsible manufacturing within the cement sector.

The competitive landscape of the cement industry is evolving rapidly, with numerous players vying for market dominance. By increasing its production capacity, Ambuja Cements aims to navigate these industry trends effectively and solidify its role as a key player in the market.

In summary, Ambuja Cements is set on a growth trajectory with its sights set on achieving 140 million tonnes in capacity through calculated acquisitions and a commitment to sustainable practices. This strategy reflects a robust response to the rising demand for cement in the context of India’s infrastructure push, promising to enhance both the company’s profitability and its market standing in the long term.

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Concrete

Ambuja Cements’ net profit falls 52% in Q2 FY25

The company recorded 9% YoY increase in sales in Q2 FY25.

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Ambuja Cements, a part of the Adani Group, reported a 52.10% decline in net consolidated profit for the quarter ending September 30, 2024. The profit after tax stood at Rs 4.72 billion, down from Rs 9 .87 billion in the same period last year, according to the company’s filing with the Bombay Stock Exchange (BSE).

The company’s total consolidated income for Q2 FY25 was Rs 78.90 billion, slightly lower than the Rs 78.99 billion recorded in the corresponding quarter of the previous fiscal.

Ajay Kapur, the company’s CEO and Whole-time Director, commented, “Following the successful completion of the Orient Cement transaction, we are on track to achieve a 100+ MTPA capacity by the end of this fiscal year.”

Ambuja Cements reported an increase in net worth by Rs 4.5 billion during the quarter, bringing it to Rs 599.16 billion. The company remains debt-free and maintains its CRISIL AAA (Stable) / CRISIL A1+ ratings. As of September 30, 2024, cash and cash equivalents stood at Rs 101.35 billion.

The company recorded a 9% year-on-year increase in sales volume, reaching 14.2 million tonnes in Q2 FY25.

During the quarter, Ambuja Cements invested Rs 22 billion by subscribing to 8% non-convertible cumulative redeemable preference shares (RPS) issued by its subsidiary, Sanghi Industries.

Additionally, the company announced a binding agreement to acquire a 46.8% stake in Orient Cements at an equity value of Rs 81 billion, solidifying its expansion strategy.

(ET)

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