Strong demand is anticipated to result in a 7-8 per cent volume growth for cement producers in FY23, but operating profit margins may drop because of high input prices, according to rating agency ICRA on Monday.
According to the analysis, the operating margins for the cement industry will be the lowest in the previous seven years. Cement industry volume is anticipated to increase in FY23 by 7-8
per cent to reach about 388 million metric tonnes.
Adani Group eyes Jaiprakash Associates’ Shahabad cement plant
Adani group has reportedly expressed interest in acquiring a cement plant from Jaiprakash Associates, located in Karnataka with a capacity of 1.2Mt per year. The plant is reportedly in the middle of an as yet incomplete deal between Jaiprakash Associates’ and Dalmia Bharath for a value of US$671mn for a transfer of the former’s cement and power plants.
It has also been reported that Adani Group is in talks with several companies over possible acquisitions as a means to double its cement producing capacity to 140mt per year by the end of 2028.
Dalmia Bharat records a hike in cement sales
Dalmia Bharat recorded a rise of 9.6 per cent in its sales y-o-yfrom 12Mt in the first half of financial year 2023 to 13.2Mt in the first half of financial year 2024. This rise has led to an increase in earnings from US$116m to US$144m during the same period. The company started commercial production from their new 5,00,000t/yr capacity clinker plant in Ariyalur and 2mt/yr Sattur grinding plant, both located in Tamil Nadu, raising the company’s clinker capacity to 22.2Mt/yr. This increase in capacity was attributed largely to the company’s foresight in estimating high growth in construction material demand in the country due to a boom in infrastructure development. The company has also managed to reduce their carbon footprint to 456kg/t of cement, lowest recording globally in the cement industry.
Total cost of decarbonising Indian cement and steel industry estimated at USD 627 bn
The Council on Energy, Environment and Water (CEEW), funded by power provider BP recently reported that it will require a Capital expenditure investment of USD627Bn to decarbonise the Indian cement and steel sector, to reach net zero CO2 emissions. According to the report, the Waste Heat Recovery (WHR) and other similar efficiency enhancing upgrades to cement plants can help reduce the industry’s emissions down by 32 per cent immediately.