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CONCOR Plans Strategy for GCT Scheme Risks

Addressing risks from common-user terminal tag.

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The Container Corporation of India (CONCOR) is developing a strategic plan to mitigate risks associated with the common-user tag for terminals operating on Indian Railways land as it transitions to the Goods and Cargo Terminal (GCT) scheme. This strategic shift is aimed at optimizing terminal operations and improving efficiency in the logistics sector.

Under the common-user terminal framework, CONCOR’s terminals are required to be accessible to all users, which ensures fair competition and prevents monopolistic practices. However, as CONCOR moves towards the GCT scheme, which involves allocating specific terminals for dedicated goods and cargo services, the company needs to address potential risks and operational challenges that could arise from this transition.

The GCT scheme is designed to enhance the efficiency of cargo handling by streamlining operations and focusing on specific types of goods or cargo. This shift is expected to improve service levels and reduce turnaround times at terminals. However, it also introduces complexities related to managing terminals that were previously operated under the common-user model.

CONCOR’s strategy will involve several key components to effectively manage the transition:

Risk Assessment: Identifying and analyzing potential risks associated with the GCT scheme, including operational, financial, and regulatory challenges.

Operational Adjustments: Implementing changes to terminal operations to align with the GCT requirements, ensuring that dedicated terminals can handle specific cargo types efficiently.

Stakeholder Engagement: Engaging with stakeholders, including shippers, rail operators, and regulatory authorities, to ensure smooth implementation and address any concerns related to the shift from common-user to GCT terminals.

Infrastructure Upgrades: Investing in infrastructure improvements to support the specialized handling of cargo at GCT terminals, enhancing capacity and efficiency.

Regulatory Compliance: Ensuring that the transition complies with all relevant regulations and guidelines to avoid potential legal or operational issues.

By developing a comprehensive strategy, CONCOR aims to minimize disruptions and leverage the benefits of the GCT scheme to enhance its logistics operations. The transition is expected to contribute to more efficient cargo handling, better service quality, and improved overall performance of CONCOR?s terminal network.

This strategic move aligns with broader efforts to modernize and optimize India?s logistics and transportation infrastructure, supporting the growth of trade and commerce in the region.

Concrete

Construction Costs Rise 11% in 2024, Driven by Labour Expenses

Cement Prices Decline 15%, But Labour Costs Surge by 25%

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The cost of construction in India increased by 11% over the past year, primarily driven by a 25% rise in labour expenses, according to Colliers India. While prices of key materials like cement dropped by 15% and steel saw a marginal 1% decrease, the surge in labour costs stretched construction budgets across sectors.

“Labour, which constitutes over a quarter of construction costs, has seen significant inflation due to the demand for skilled workers and associated training and compliance costs,” said Badal Yagnik, CEO of Colliers India.

The residential segment experienced the sharpest cost escalation due to a growing focus on quality construction and demand for gated communities. Meanwhile, commercial and industrial real estate remained resilient, with 37 million square feet of office space and 22 million square feet of warehousing space completed in the first nine months of 2024.

“Despite rising costs, investments in automation and training are helping developers address manpower challenges and streamline project timelines,” said Vimal Nadar, senior director at Colliers India.

With labour costs continuing to influence overall construction expenses, developers are exploring strategies to optimize operations and mitigate rising costs.

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Concrete

Swiss Steel to Cut 800 Jobs

Job cuts due to weak demand

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Swiss Steel has announced plans to cut 800 jobs as part of a restructuring effort, triggered by weak demand in the global steel market. The company, a major player in the European steel industry, cited an ongoing slowdown in demand as the primary reason behind the workforce reduction. These job cuts are expected to impact various departments across its operations, including production and administrative functions.

The steel industry has been facing significant challenges due to reduced demand from key sectors such as construction and automotive manufacturing. Additionally, the broader economic slowdown in Europe, coupled with rising energy costs, has further strained the profitability of steel producers like Swiss Steel. In response to these conditions, the company has decided to streamline its operations to ensure long-term sustainability.

Swiss Steel’s decision to cut jobs is part of a broader trend in the steel industry, where companies are adjusting to volatile market conditions. The move is aimed at reducing operational costs and improving efficiency, but it highlights the continuing pressures faced by the manufacturing sector amid uncertain global economic conditions.

The layoffs are expected to occur across Swiss Steel’s production facilities and corporate offices, as the company focuses on consolidating its workforce. Despite these cuts, Swiss Steel plans to continue its efforts to innovate and adapt to market demands, with an emphasis on high-value, specialty steel products.

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Concrete

UltraTech Cement to raise Rs 3,000 crore via NCDs to boost financial flexibility

UltraTech reported a 36% year-on-year (YoY) decline in net profit, dropping to Rs 825 crore

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UltraTech Cement, the Aditya Birla Group’s flagship company, has announced plans to raise up to Rs 3,000 crore through the private placement of non-convertible debentures (NCDs) in one or more tranches. The move aims to strengthen the company’s financial position amid increasing competition in the cement sector.

UltraTech’s finance committee has approved the issuance of rupee-denominated, unsecured, redeemable, and listed NCDs. The company has experienced strong stock performance, with its share price rising 22% over the past year, boosting its market capitalization to approximately Rs 3.1 lakh crore.

For Q2 FY2025, UltraTech reported a 36% year-on-year (YoY) decline in net profit, dropping to Rs 825 crore, below analyst expectations. Revenue for the quarter also fell 2% YoY to Rs 15,635 crore, and EBITDA margins contracted by 300 basis points. Despite this, the company saw a 3% increase in domestic sales volume, supported by lower energy costs.

In a strategic move, UltraTech invested Rs 3,954 crore for a 32.7% equity stake in India Cements, further solidifying its position in South India. UltraTech holds an 11% market share in the region, while competitor Adani holds 6%. UltraTech also secured $500 million through a sustainability-linked loan, underscoring its focus on sustainable growth driven by infrastructure and housing demand.

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