Emami Cements

Emami Cement Company's Expansion Plans

Emami Double Bull Cement, manufactured by Emami Cement Limited has a current total cement capacity of 4 MTPA through the mother clinker plant in Chhattisgarh and a grinding unit at Panagarh, West Bengal. Emami Cement has ambitious plans to up its market share to 10% in all the regions of its sales operations by March 2019.

For this to happen, the company expects to take up its production capacity to 6 MTPA (Million Tons Per Annum) from the current operational production capacity of 3.2 MTPA. To achieve the production targets, the company would also be ready with its new grinding unit of another 2 MTPA in Jajpur, Odisha.

Mr. Vivek Chawla, is the CEO of Emami Cement Limited. Emami cement's areas  of sales operation include Chattisgarh, West Bengal, Jharkhand, Bihar, Odisha, Eastern Madhya Pradesh and Vidarbha regions. As a part of their expansion plan, they have recently acquired two limestone mines in Rajasthan and Andhra Pradesh.

Emami Cement Limited is a part of the Rs 50,000 cr Emami Group of Companies, which has leadership presence in other diversified industries such as FMCG, paper and newsprint, edible oil & bio–diesel, hospital, real estate, ball point tips, pharma retail, book & leisure stores, contemporary art and solar power.

Cement Prices Under Pressure

Monsoon and GST suppresses demand. 

 

Post implementation of GST suppressed demand from both retail housing and infrastructure projects and the fall-out was a dip in all-India cement prices. Last month alone the all-India average price of a 50 kg bag fell to ₹300. To add to the cement industry's woes was seasonal rains and flooding in most of the large cement-consuming states which also impacted demand to a large degree.

Cement prices have declined by four per cent as cement companies passed on the benefit of lower tax under the GST regime to consumers.

While the demand scenario is likely to remain negative in the current month owing to festivities and an inauspicious period to start new ventures, demand for cement is expected to pick-up in the second half of this month with the revival in rural demand due to a favourable monsoon and acceleration in infrastructure development.

The upcoming assembly elections in Gujarat, Madhya Pradesh, Rajasthan and Karnataka in the next 12-18 months is expected to drive demand due to pre-poll spending.

Cement prices in the north India including Rajasthan, Jammu and Kashmir, Himachal Pradesh, Punjab, Uttarkhand and Haryana fell for the fourth consecutive month due to the monsoon and cement dealers transition from VAT to GST.

Dip in average cement price were as under:

Andhra Pradesh and Telengana down Rs.20-25 a bag to Rs.285-290.
Karnataka and Kerala down Rs.10-12 a bag to 330-335.
Maharastra, Gujarat and Goa down Rs.12-15 a bag to Rs.295-300. 

India Cements' Market Expansion Plans

India Cements To Concentrate On Speciality Cements 

While other cement companies are waiting for the Government to step in with infrastructure investment as a stimulus to to revive growth, Chennai-based cement major India Cements is planning at achieving better capacity utilisation by tapping the northern, eastern and western markets during the current financial year.

At the company’s 71st AGM, Mr. N.Srinivasan, vice-chairman & managing director stated that India Cements was taking steps to diversify product portfolio to improve capacity utilisation. The company is already producing oil well cement and has plans to bid for tenders for supplying sleeper cement. It would also continue the export of cement to Sri Lanka under the company’s brand name which is well established there. He also stated the the company would focus on reducing debt, introduce speciality cements and boost exports, in line with the company’s plans to turn the focus back on core businesses and exit non-core businesses.

He further stated that the cement industry was facing a situation of excess capacity, with south India in particular facing maximum surplus capacity. While there was sporadic growth in non-southern states, he added, not all regions have seen growth at a reasonable level. However, now that prices had stabilised, there was a distinct possibility of improvement in cement demand all over India. This, along with various schemes and projects taken up for implementation by the Centre and states, and an long expected expansionary Union Budget, could improve capacity utilisation.

Mr. N.Srinivasan also pointed out that due to the increasing cost of inputs, cement companies were facing. Mergers and Acquisitions by bigger players were also likely to gain pace, though on a smaller than expected scale and with focus on gaining strategic and operational competitive advantages. He added that Financially stressed companies were selling assets. And in some cases, regulations imposed by the Competition Commission of India had forced cement companies to sell their assets.