Connect with us

Economy & Market

Demand uptrend persists, amid price pressures

Published

on

Shares

Cement demand that has started picking up in the third quarter (October-December 2017) of fiscal 2018 (FY18) continued its growth streak in the fourth quarter of the fiscal, according to analysts. However, cement realisations failed to post commensurate rise, and prices, which should have seen an uptrend in the last quarter of the year, have remained subdued.Sabyasachi Majumdar, Senior Vice President & Group Head, ICRA Ratings, says, "A demand pick-up in the recent months, October 2017 to January 2018 by 13.4 per cent, is backed by low cost housing in the eastern markets, Andhra Pradesh and Telangana along with the infrastructure demand from the eastern, southern and western markets."
Discussing the latest demand trends, CLSA’s Vivek Maheshwari and his team says, "The industry has seen a pick-up in volume growth, also reflected in 11 per cent volume growth expected for our coverage in 4QFY18 (January-March 2018 quarter). While a low base helped (these volumes), the two-year Compounded Annual Growth Rate (CAGR) should still be at a respectable ~8%." Besides, cement realisations have not seen any quarter-on-quarter (QoQ) uptick despite favourable seasonality.
The demand environment continued to remain favourable in March 2018, said Binod Modi – Senior Research Analyst, Reliance Securities, in a recent report, adding, however, the pricing trend remained subdued marked by sharp month-on-month (MoM) contraction during the month. Volume push owing to year-end month, and fair chances of price hike from April 2018 also aided volume growth.
"Demand growth was aided by both trade and non-trade segments and most dealers expect the demand momentum to remain benign till the onset of monsoon, while the prices are expected to bounce back from first or second week of April across the regions barring Central," said Modi.
"A pick-up in the affordable and rural housing segments and infrastructure – primarily road and irrigation projects – is likely to continue the demand growth momentum of around 5 per cent in FY2019," says Majumdar.
Budget FY2019 has provided higher rural credit target, increased MSP, and allocation for rural, agricultural and allied sectors, and stressed on continued focus on the PMAY and infrastructure investments, all positive for cement demand growth. Price falls
There was a disappointment on the price front for the cement companies in the Q4FY18. March quarter is traditionally the busiest quarter for construction, and hence cement prices usually firm up sequentially, but not this time.
All-India average cement price corrected by about 3 per cent MoM to ~Rs 286-291/bag mainly due to sharp correction in Western and Southern realisation, which corrected by ~6 per cent and 5 per cent MoM, respectively in March, while average prices in Northern, Central and Eastern regions corrected by ~1 per cent MoM each, according to Reliance Securities. Besides, all-India average price declined by 1 per cent YoY (Rs 3-5/bag) and 0.3 per cent QoQ in 4QFY18.
Average price in Southern region corrected sharply by 5 per cent QoQ, while it corrected by 1-1.5 per cent QoQ in Western and Northern region during 4QFY18. However, Eastern and Central regions witnessed average price improvement of ~3 per cent and ~4 per cent QoQ, respectively during 4QFY18.
CLSA said that their channel checks had indicated that "efforts are underway to raise prices by 5-20 per cent in South India and Maharashtra," the regions which saw the highest pressures on EBITDA, follow the sharp cuts in March. However, the channel is still apprehensive on sustainability of such hikes.
"Overall, while cost inflation remains a concern, we believe that price hikes are imminent across regions and unit margins should expand in FY19," says Maheshwari.
Though government seems to be vigilant about any price hike by the cement companies for last couple of months, Modi of Reliance Securities expects "prices to witness an upward movement in coming months due to rising cost pressures
and sustained demand growth leading to higher utilisation."Cost pressures
"Overall earnings before interest, tax, depreciation and amortisation (EBITDA or operating profit) for our coverage should rise by a modest 7 per cent year-on-year (YoY) although net earnings will likely decline," Maheshwari says in the report. This is mainly due to high costs particularly those of pet coke, imported coal and diesel, however, rising volumes are expected to come to manufacturers’ rescue during the quarter to an extent. Due to lack of price hikes during the quarter EBITDA margins are expected to decline by 7-8 per cent YoY and QoQ to a 13-quarter low, for CLSA’s universe of cement stocks, Maheshwari said in the report.
Majumdar also predicts that expectation of higher pet coke, coal and diesel prices are likely to put pressure on the profitability margins and debt metrics of the cement companies in the coming quarters.
"Lumpy capacity additions in the recent past have led to an increase in debt levels and some deterioration in credit metrics, although they still remain at comfortable levels for most of the larger players. Further, higher power and fuel (increase in coal and pet coke prices) and freight costs (increase in diesel prices) in FY2018 and in the coming quarters of FY2019 is likely to continue to put pressure on the profitability margins and debt metrics of the cement companies. Hence, the ability of the industry players to secure increases in cement prices remains critical from the profitability perspective," Majumdar reiterated.
Given all these scenarios, ICRA expects that the capacity overhang and the moderate demand growth to continue to keep the industry’s capacity utilisation level close to 65 per cent over the medium-term (3-5 years).

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Economy & Market

Leonard Unveils Dual-Head Robotic Arm for Hazardous Industrial Demolition

Published

on

By

Shares

 Leonard unveils Descender Duo, a dual-head robotic demolition arm designed to improve industrial safety and reduce shutdown time by up to 50 per cent.

Industrial robotics and refractory services specialist Leonard has launched Descender Duo, a dual-head robotic demolition arm designed to improve safety, accelerate maintenance and reduce shutdown times in hazardous industrial environments. The system made its debut at Lisahally Power Station in Northern Ireland, removing 25 tonnes of slag material within hours.

Developed for the cement, metals, waste-to-energy and petrochemical industries, Descender Duo enables remote-controlled refractory demolition, anchor cutting and welding, and refractory spraying inside boilers, calciners and silos. Its vertical-access design eliminates the need for personnel to enter confined, high-risk spaces during these operations.

Weighing less than two tonnes, the pre-assembled system requires an access opening of just 1.2 m². Supported by an external overhead hoist, it uses electrically operated hydraulic stabilising legs to secure itself inside vessels. The robotic arm offers 360-degree rotation and is suited to vessels approximately 9 m in diameter, with its operating reach extendable through strategically positioned access points.

Equipped with two independently controlled robotic heads, Descender Duo can perform identical or different tasks simultaneously, including refractory demolition, anchor cutting and spraying. Its remote-control system incorporates live camera feeds, allowing operators to monitor operations without entering hazardous environments.

According to Leonard, the technology can deliver time savings of up to 50 per cent compared with manual methods. Its ability to operate at temperatures exceeding 100°C allows maintenance to begin as early as 24 hours after burner shutdown. An all-electric power supply further supports cleaner and more cost-efficient operations.

First Deployment Demonstrates Shutdown Efficiency

The system was first deployed at Burmeister & Wain Scandinavian Contractor’s (BWSC) Lisahally Power Station in Londonderry, Northern Ireland. The facility generates electricity from grade C waste wood, supplying approximately 40,000 homes and businesses.

Leonard and BWSC collaborated to develop a customised solution for the plant’s 26-metre furnace, where extensive external pipework created significant access challenges.

Mark Leonard, Managing Director, Leonard, said, “It required new thinking and rather than step away from the problem we were committed to solving it for the customer, with the customer. We’re relentless in our approach to tackling complex challenges, head-on. We took our years of cement plant experience, coupled with our working knowledge of the BWSC plant, and designed, engineered and tested a completely new vertical solution within just seven weeks from that initial conversation with the customer. That solution was the Descender Duo as we know it today.”

Traditionally, the furnace required a cooling period of up to 36 hours before preparatory work could begin, followed by manual slag removal using rope-access personnel. With Descender Duo, work commenced just 24 hours after shutdown, reducing downtime by up to one day.

The deployment removed 25 tonnes of slag within hours, eliminated the need for at least six workers to enter the hazardous furnace interior and saved 26 hours in the shutdown programme.

“The effectiveness exceeded expectation,” said Martin Doran, Plant Manager at Lisahally Power Station.

“When the Descender Duo concept was first discussed, we had to spend some time with the team from Leonard looking at how it was going to be moved into the furnace. Every site is different and that presented its own challenges, but nothing that the team couldn’t overcome. Once it was installed we were hugely impressed by its efficiency.”

Expanding Industrial Robotics Applications

Descender Duo joins Leonard’s existing portfolio of robotic maintenance solutions, including the Axis horizontal-access arm, Nano confined-space access arm, Charger cement mill media recharging system and Calibre cement mill media grading system.

Headquartered in Northern Ireland, Leonard provides robotic refractory demolition, installation, inspection and industrial maintenance services across the cement, metals, energy, biomass, glass and civil engineering sectors.

Formerly known as G Leonard, the company has more than 35 years of industry experience and operates across Europe, North America, the Middle East, Africa and Asia-Pacific.

The latest innovation reinforces Leonard’s focus on replacing hazardous manual processes with robotic systems that improve workforce safety, enhance operational efficiency and minimise industrial downtime.

Continue Reading

Concrete

Martin Engineering Appoints Ashwini Khunte as India General Manager

Published

on

By

Shares

Martin Engineering names Ashwini Khunte India General Manager to strengthen operations and drive growth across key bulk material handling sectors.

Pune

Martin Engineering, a global provider of bulk material handling solutions, has appointed Ashwini Khunte as General Manager of its India business, strengthening its leadership as the company expands its presence across the country’s cement, mining, steel, power and infrastructure sectors.

Khunte brings more than a decade of experience with Martin Engineering, having joined its Indian operations in 2013 as a Design Engineer, shortly after the company established its presence in the country in 2012.

A mechanical engineer by qualification, she spent her initial five years developing bulk material handling solutions in collaboration with the company’s operations team. During this period, she gained extensive experience addressing operational challenges in the steel, cement and coal industries. She subsequently moved into project engineering, managing major engineering, procurement and construction (EPC) and original equipment manufacturer (OEM) projects from initial enquiry to commissioning. Her responsibilities later expanded to overseeing Martin Engineering’s conveyor product portfolio in India, involving customer engagement, technical presentations and site visits across heavy industries.

In 2024, Khunte was promoted to Head of Sales & Marketing for the company’s Europe, Middle East, Africa and India (EMEAI) region. The position broadened her international market exposure and strengthened her strategic and commercial leadership capabilities.

Commenting on her appointment, Ashwini Khunte, General Manager, Martin Engineering India, said: “India represents a tremendous opportunity for Martin Engineering. The country’s continued investment in cement, mining, steel, power and infrastructure is creating increasing demand for safer, cleaner and more productive bulk material handling, and that’s exactly what we do. My priority will be to build on the strong foundations already established in India, while continuing to develop our people, strengthen customer relationships and bring practical solutions to the challenges faced by our industry.”

Robert Whetstone, Area Vice President – EMEAI, Martin Engineering, highlighted Khunte’s technical expertise, market understanding and leadership experience.

“Ashwini brings an exceptional combination of technical understanding, customer knowledge and commercial leadership. She has grown as Martin Engineering has grown, and has consistently demonstrated outstanding capability to transform her expertise into practical solutions. Her knowledge of the Indian market, together with her international experience, makes her ideally suited to lead our India business through its next stage of growth for years to come.”

Since establishing its Indian business in 2012, Martin Engineering has expanded its local workforce, manufacturing capabilities and dealership network. The company supplies conveyor products, transfer point solutions, material flow aids, training and technical support to bulk material handling industries. Khunte’s appointment positions the company to further strengthen customer relationships and expand its solutions portfolio in India’s growing industrial and infrastructure markets.

Continue Reading

Concrete

Fornnax Wins AIRIA’s Special Export Award for Rubber Machinery in 2025-26

Published

on

By

Shares

Fornnax Technology Pvt. Ltd. has been honoured with the Special Export Award – Rubber Machinery for 2025–26 by the All-India Rubber Industries Association (AIRIA), in recognition of its highest exports of tyre recycling plants to the European region.

With more than a decade of experience in India’s tyre recycling industry, Fornnax has contributed to the development of advanced recycling technologies and infrastructure. The company currently holds a 90% market share in India’s domestic tyre recycling sector, while exports account for 30% of its business, spanning markets such as Europe, Australia and the GCC.

The award marks another milestone for Fornnax, whose tyre recycling lines and advanced shredding technologies are supporting the growth of the circular economy in India and international markets.

Commenting on the recognition, Mr. Jignesh Kundaria, Founder and Director of Fornnax, said:

“This honour from AIRIA is a reflection of an incredible journey we have undertaken over the years. When we started Fornnax, there was no established recycling industry in India to follow. We chose to build for the future instead. Today, when you see India’s tyre recycling sector, it has already transformed into a dynamic, high-growth industry and we are extremely proud to have played our part in building it.”

Unlike standalone equipment suppliers, Fornnax focuses on developing complete, high-capacity recycling infrastructure. Its integrated systems combine multiple stages of shredding and size reduction to enable efficient, continuous operations. This system-level engineering approach helps recycling operators improve throughput, equipment reliability and operational consistency.

The recognition reinforces Fornnax’s commitment to developing engineering technologies that contribute to a more efficient and circular recycling ecosystem.

Looking ahead, the company aims to expand its international presence while continuing to develop advanced shredding and recycling solutions to address the growing volumes and evolving requirements of the global recycling industry.

For more information, visit: www.fornnax.com

Continue Reading

Video Thumbnail
▶

    SIGN-UP FOR OUR GENERAL NEWSLETTER

    Trending News

    SUBSCRIBE TO THE NEWSLETTER

     

    Don't miss out on valuable insights and opportunities to connect with like minded professionals.

     


      This will close in 0 seconds