India Profit League under attack
Cement companies in India have been facing rough weather last few quarters. The causes of their woes are manifold - rising coal prices and power tariffs, shortage of coal and gypsum forcing them to import these commodities at high costs, depreciating rupee against the dollar further making the imports dearer, increasing transportation costs due to rising diesel prices and railway tariffs, hardening interest rates increasing their interest outgo, excess installed capacity creating glut in supply, and what have you. Most of these factors are beyond the control of cement companies and have severely impacted the margins of most of the industry players. To add to their woes, the cement players are also facing a probe by the Competition Commission of India into charges of cartelization. Yet, despite such heavy odds, some of the industry leaders such as Ultratech, ACC, India Cements, among others, have been able to post impressive annual numbers. These leaders have obviously done some out-of-the-box thinking to come out winners in these challenging times, and other players would do well to emulate them in order to not just survive but also thrive.
In this issue we are carrying a special report by
Upen Patel, Business Director at BASF
on concrete corrosion and its repair and control. Repairing and strengthening of corroding concrete helps in rejuvenating old structures and increasing their life expectancies. Today's complex and fast-paced construction methods make concrete repairs, strengthening and protection procedures much more demanding than in the past. The futuristic but simple techniques suggested by the author are insightful and valuable.
The Technology feature by
Mayank Nigam of Siemens India focuses on Intelligent Motor Control Centers
(i-MCC) which are invaluable tools for plant operators. The i-MCCs provide critical information, early warnings and enhanced level of data transparency from individual motor feeders to the plant operator which helps prevent tripping, failure and sudden shut-down of motors thereby avoiding huge monetary losses to companies.
Our Spotlight section features SANY Group, the leading manufacturer of concrete machinery equipments and heavy construction machinery.
India Cements' sales volume was marginally higher than a year ago, yet strong cement prices helped enhance revenue. Adjusting for income from the Indian Premier League and its shipping business, the company's realization per tonne was higher by around 13 per cent, compared with a year ago. The management highlighted that variable costs increased year-on-year by around 11 per cent to Rs 1,950 a tonne. While its capacity utilization of 67 per cent for the quarter was better than the southern average of 63 per cent, but much lower than the all-India average of 75 per cent.
So while runs may come easier on the field, making profits has only got tougher for cement companies.
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