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Cement demand picks up in June quarter

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Cement transported by rail in May 2022 were 2% higher than in April

Demand for cement increased in the June quarter, the peak season for construction before the monsoon.

Cement volumes transported by rail in May 2022 were 2% higher than in April, and up 30% from a year earlier. The year-on-year (YoY) growth is also expected to have been supported by the previous year’s lower base due to lockdowns, as per JM Financial Institutional Equities data.

In May, volumes were also 3% higher than average volumes in January-February 2022, though March volumes are lumpy and not comparative. The cement volumes are expected to have increased well in May, too.

Volume growth can push operating leverage at a time cost headwinds remain increased. However, the approaching monsoon season may cap volume growth in the forthcoming months as construction activities slow down during monsoon.

Analysts already have a cautious view of the cement sector looking at cost headwinds posed by higher fuel prices and also more increased logistics costs. The March quarter and FY22 earnings hold testimony.

UltraTech, India’s largest cement manufacturer, witnessed a consolidated revenue increase of 18% YoY in FY22, led by a 9% and 8% growth in sales volume and combined realisation respectively. However, the 14% YoY rise in per tonne operating expenses led to a decrease in operating margins, while earnings before interest, taxes, depreciation, and a mortisation (Ebitda) remained flat. The story was no different for others.

Dalmia Bharat saw a 20% rise in expenses while the prices improved by just 3%.The Jefferies report said cement coverage registered inline YoY Ebitda reduction of 20% for FY22, on cost forces. Volumes were flat YoY while growing 17-18% QoQ, pushing Operating leverage led QoQ uptick in unit Ebitda.

Head of retail research at HDFC Securities Ltd, Deepak Jasani, said that in cement, cost forces would continue to pose headwinds for producers. Cement makers have raised prices several times in the past few months as demand picked up. However, price improvement persists to lag with soaring prices.

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Also read: Indian cement industry likely to add 80 million tonne capacity by 2024

Concrete

15th Cement EXPO to be held in March 2025 in Hyderabad

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Cement EXPO 2025, which will be held along with the 10th Indian Cement Review Conference and the 8th Indian Cement Review Awards, promises to be bigger, drawing in greater participation, fostering more profound discussions and showcasing the continued evolution of the cement industry.

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After the arousing success of the 14th Cement EXPO, which was held on December 14-15, 2023 at Manekshaw Centre along the 9th Indian Cement Review Conference and the 7th Indian Cement Review Awards, the next edition of Cement EXPO will be hosted in March 2025 in Hyderabad. The 15th Cement EXPO promises to be bigger and even more impactful than 2023 edition with more participating companies and larger exhibition area. The 3-in-1 event is organised by FIRST Construction Council (an infrastructure think tank) and Indian Cement Review (ICR).

The 14th Cement EXPO received big thumps up from the industry with over 1,500 senior managers/decision makers visiting the expo. The EXPO was inaugurated by Dr Vibha Dhawan, Director General, TERI; and Ali Emir Adiguzel, Founder and Director, World Cement Association, along with Pratap Padode, Founder, FIRST Construction Council (FCC). Top notch companies from the Indian cement industry’s supply chain presented their latest innovations and offerings in the sprawling two-tiered exhibition space.

The 14th Cement EXPO garnered significant support from the Ministry of Road Transport and Highways, Government e-Marketplace (GeM), and the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India (GoI).

The 7th Indian Cement Review Awards presented awards to 11 companies in different categories recognising their contribution to growth and innovation in the industry. While Parth Jindal (Managing Director of JSW Cement) was conferred with the Indian Cement Review – Person of the Year Award 2023, Vinita Singhania (Vice Chairman and Managing Director at JK Lakshmi Cement Ltd) was presented with the prestigious Lifetime Achievement Award.

With a theme centred on ‘Driving Sustainability Through Technology’, the 9th Indian Cement Review Conference hosted thought provoking discussions, panel sessions, and presentations, showcasing the industry’s commitment to embracing cutting-edge solutions.

The success and resonance of the 2023 edition has laid the groundwork for the 15th Cement EXPO 2025, which is bound to be bigger, drawing in greater participation, fostering more profound discussions and showcasing the continued evolution of the cement industry.

The EXPO, along with the 10th Indian Cement Review Conference and the 8th Indian Cement Review Awards, will contribute significantly to the ongoing transformation of the cement industry.

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Concrete

Shree Cement breaks ground at two sites

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Shree Cement has recently commenced the construction of two new 3.5Mt/yr cement plants in Etah and Prayagraj, Uttar Pradesh, as per news reports. This development is in line with the company’s memorandum of understanding (MoU) with the Uttar Pradesh government, signed in February 2023. With the aim of achieving 9Mt/yr in installed capacity by February 2026, the company plans to invest an estimated US$241 million. Currently, Shree Cement operates a 2Mt/yr integrated cement plant in Bulandshahr.

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JK Lakshmi Cement records hike in profits

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JK Lakshmi Cement announced a significant increase in standalone net profit, which jumped by 69 per cent to Rs.124.06 Crores in the Oct-Dec 2023 quarter. The company achieved a 7 per cent increase in standalone net sales and reported a clinker capacity utilisation of 105 per cent and cement capacity utilisation of 79 per cent in the same quarter. The company attributed its improved profitability to higher volume, better product and sales mix, and a reduction in fuel costs.
In terms of sustainability initiatives, the company is implementing projects to enhance its TSR and WHR capacity, as well as sourcing solar power to increase the share of renewable energy at its Durg Cement Plant. Additionally, the company’s subsidiary, Udaipur Cement Works Ltd (UCWL), successfully commissioned its second clinker line and is expected to commission its cement grinding capacity expansion soon.
The company is also undertaking expansion projects, including increasing clinker capacity and establishing cement grinding units at various locations, with a proposed investment of Rs.2,500 crores. Funding for this project is proposed to be through term loans from banks and internal accruals. The company also announced an interim dividend of 40 per cent.

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