Cement Update

1 | Monthly Report August 2021

Monthly Report - AUGUST 2021

Cement Update


Disclaimer: The information contained in this market update is drawn from wide range of newspapers, business and trade magazines, government, company and industry association websites. While all possible care is taken to verify the correctness and authenticity of information contained in this compilation, no claim to independent authorship of articles is implied or intended. Readers are expected to make their own independent evaluation and verification of information for their use. While all information contained in this report are believed to be correct, the editors of this compilation or J.M.Baxi & Co. do not guarantee the quotes or other data

TABLE OF CONTENTS

Port Analysis .................. 03

India’s government urged to reopen cement works .................. 08

JK Lakshmi Cement to invest in augmenting existing capacities in North, West markets .................. 09

Ambuja Cements to invest Rs 310 crore to expand Ropar unit in Punjab .................. 10

Prospects for cement industry in FY22 look bright, says Kumar Mangalam Birla .................. 11

Vedanta invites partnership from cement companies for by-products .................. 12


PORTANALYSIS

Cement Traffic At Indian Ports (Qty in Metrics Tonnes)


CEMENT TRAFFIC AT INDIAN PORTSQTY IN METRIC TONNES

Port Name Apr - June 21 Apr- June 20 Variance Y-o-Y

BEDI 52602 0 52602

CHENNAI 2200 0 2200

COCHIN 291059 245325 45734

DHARAMTAR 127182 57400 69782

GOPALPUR 50000 25000 25000

JNPT 175646 77597 98049

KAKINADA 3150 156562 -153412

KANDLA 35000 1504 33496

KRISHNAPATNAM 317228 188300 128928

MANGALORE 111771 82000 29771

MUMBAI 14286 2100 12187

MUNDRA 72748 0 72748

PARADIP 131050 0 131050

PIPAVAV 446017 403051 42966

PORBANDAR 14650 6800 7850

PORT BLAIR 13000 0 13000

Grand Total 1857588 1384518 473070


CEMENT IMPORTS - JULY 2021 QTY IN METRIC TONNES

IMPORTERS COASTAL

AMBUJA CEMENT LTD. 24387

PENNA CEMENT INDUS. LTD. 50000

SANGHI CEMENTS LTD. 5226

ULTRATECH CEMENT LTD. 54865

CEMENT EXPORTS - JULY 2021 QTY IN METRIC TONNES

EXPORTES COASTAL SRI LANKA

FAIRMAX SHIPPING TRANSPORT SER. 3150

PENNA CEMENT INDUS. LTD. 50000 36000

SAURASHTRA CEMENT LTD. 1850

ULTRATECH CEMENT LTD. 79629 37400


Market Outlook and Trends

Cement Raw Material (CRM) includes Limestone, Gypsum, Clinker

NOTE: Above Statistics is drawn from data received from Port and Custom Authorities, while all information is believed to be correct, the editors of this compilation or JM Baxi do not guarantee the authenticity of data.


HIGHLIGHTSHIGHLIGHTS

• India’s government urged to reopen cement works• JK Lakshmi Cement to invest in augmenting existing

capacities in North, West markets • Ambuja Cements to invest Rs 310 crore to expand Ropar unit

in Punjab• Prospects for cement industry in FY22 look bright, says

Kumar Mangalam Birla• Vedanta invites partnership from cement companies for by-

products


• The plant stopped manufacturing in 1996 due to the lack of working capital and as per the scheme of the Board for Industrial and Financial Reconstruction (BIFR)

India’s Union government has been urged by a Telangana state minister to revive Adilabad’s Cement Corp of India (CCI) plant in the state. In a letter to Heavy Industries Minister, Mahendra Nath Pandey, a request was made for the reopening of the plant which has remained

India’s government urged to reopen cement works

closed since 1996. The CCI plant in Adilabad began production in 1984, serving the cement requirements in the Marathwada and Vidarbha regions of Maharashtra and north Telangana. The plant stopped manufacturing in 1996 due to the lack of working capital and as per the scheme of the Board for Industrial and Financial Reconstruction (BIFR), according to The News Minute. The cement works has a live mining lease with limestone deposits of around 48Mt. The unit also has a power supply connection of 32kVA and water availability. Source: Cemnet.com


• JK Lakshmi Cement will selectively invest in augmenting its existing capacities in Northern and Western markets in next few years in a bid to enhance its footprint as well as market share, its Chairman & Managing Director Bharat Hari Singhania has said.

JK Lakshmi Cement to invest in augmenting existing capacities in North, West markets

operationalisation of these new mining blocks, which shall not only add to competitiveness in existing markets but also help in opening new markets also,” Singhania added. While talking about the financial year gone by, he said FY21 presented two pictures that are in sharp contrast. “If the cement demand was just above 4 million MT in April 2020 (lowest of cement demand in any month in more than a decade); it was slightly below 33 million MT in March 2021 (second highest of cement demand in any month in the history). While the first reflects a complete economic downhill; the latter is a blossoming hope full of promises,” Singhania added. In FY 21, despite all odds, JK Lakshmi Cement’’s volumes grew by 8 per cent and Profit After Tax increased by over 55 per cent. Its turnover in FY21 was at Rs 4,459 crore. JK Lakshmi Cement Vice Chairman & Managing Director Vinita Singhania said: “We are optimistic and are already seeing some early signs of recovery of the economy, from the COVID pandemic. With the gradual easing of lockdown restrictions by state governments, it is hoped that we will soon reach a normalcy stage.” ‘The government’’s continuous emphasis on affordable housing and infrastructure augurs well for the economy in general and the cement Industry in particular. According to the company, once the storm caused by the pandemic settles down, the cement industry shall witness a “prolonged phase of stable demand growth” of about 5 to 6 per cent per annum, though the momentum lost during COVID may still take some time to fully recover. Source: Free Press Journal

It has drawn up ambitious growth plans including expansion of manufacturing base, adding new products and entering into new markets, according to the latest annual report of JK Lakshmi Cement Ltd. The company expects “significant change” in construction technologies and practices, which in turn will bring exponential growth of demand for ready-to-use value-added construction products. “Continuing with this optimistic finale to the year gone by, your company shall selectively invest in augmenting the existing capacities in Northern and Western parts of the markets in next few years to enhance market share,” Singhania said. However, the company did not mention the amount which it plans to invest. The combined capacity of JK Lakshmi Cement stands at 13.3 Million Metric Tonnes per Annum (MTPA). The company has been recently awarded two limestone mining blocks – one in Central Rajasthan and another in Coastal Gujarat through e e-bidding. “... each of these can support at least 5 Million MTPA cement capacity for 40 – 50 years. In coming years your company will invest to make progress in the


• The expansion at the Ropar plant is expected to be completed by June 2023 and after this total capacity of the cement grinding unit at Ropar will increase to 4.5 MTPA from 3 MTPA. “This expansion will help the company maintain its share and competitiveness in the northern markets in India. The Ropar brownfield expansion is part of the company’s strategy to increase its total cement capacity to 50 MTPA in the mid-term,” said Ambuja Cements.

Ambuja Cements to invest Rs 310 crore to expand Ropar unit in Punjab

MTPA now, it added. “This expansion will help the company maintain its share and competitiveness in the northern markets in India. The Ropar brownfield expansion is part of the company’s strategy to increase its total cement capacity to 50 MTPA in the mid-term,” said Ambuja Cements. Ambuja Cements MD and CEO Neeraj Akhoury said the company is optimistic about the growth in demand for cement in India. “The expansion of our Ropar unit along with more investment in the coming years will help us unlock fresh opportunities by debottlenecking of existing capacities and create new ones across the country. We expect our expansion plans to add around 15 MTPA capacity in the mid-term taking our total cement capacity to 50 MTPA,” he said. Ambuja will also be commissioning new capacity in Marwar, Rajasthan, that will enhance clinker capacity by 3 MTPA and help increase cement sales by 5 MTPA, thereby contributing to the long term strategy of capacity expansion. This greenfield integrated plant is being set up with a total investment of Rs 2,350 crore.Ambuja Cement has a cement capacity of 29.65 MTPA with five integrated cement manufacturing plants and eight cement grinding units across the country. Source: Economic Times Source: Cement News

Ambuja Cements, part of Swiss building material major Holcim group (earlier, LafargeHolcim) on Monday said it will invest Rs 310 crore to expand the production capacity of its plant at Ropar, Punjab, over the next two years. The said investment is a part of Ambuja Cements Ltd (ACL) aim to have a total cement capacity to 50 MTPA (million tonnes per annum)in the mid-term and in anticipation of a growing demand for cement triggered by the steady growth in India’s urbanisation leading to more investment in public infrastructure and housing, the company said in a statement. The expansion at the Ropar plant is expected to be completed by June 2023 and after this total capacity of the cement grinding unit at Ropar will increase to 4.5 MTPA from 3


• The government’s spending on infrastructure projects and affordable housing schemes such as the Pradhan Mantri Awas Yojana (PMAY) with enhanced budgetary allocations will be the primary drivers of growth for the cement industry, said the latest annual report of the Aditya Birla group firm.

Prospects for cement industry in FY22 look bright, says Kumar Mangalam Birla

trends were seen from the latter part of May 2020, driven largely by a better-than-expected pick-up cement consumption in the rural markets. “Amidst the pandemic, cement consumption witnessed strong growth in the rural, semi-urban and retail markets. In rural India, better labour availability, increase in construction of rural infrastructure and low-cost housing drove cement demand,” he added. Demand is also getting influenced by the resumption of construction work related to institutional infrastructure projects such as road and metro rail networks, Birla added. According to the Cement Manufacturing Association (CMA), the total installed capacity in the Indian cement sector is approximately 545 million tonnes per annum. It accounts for nearly 7 per cent of the global installed capacity. The Indian cement sector is the second-largest cement industry in the world, according to CMA. While talking about UltraTech, Birla said the board has approved a fresh CAPEX of Rs 5,477 crore towards increasing the capacity by 12.8 MTPA with a mix of brownfield and greenfield expansions. “The additional capacity will be created in the fast-growing markets of the east, central, and northern regions of the country. This expansion is in addition to your company’s 6.7 MTPA capacity expansion currently underway in Uttar Pradesh, Odisha, Bihar and West Bengal,” he said. Commercial production from these capacities is expected to go on stream in a phased manner during FY22 and FY23, Birla added. UltraTech, with a consolidated capacity of 116.8 million tonnes per annum (MTPA) of grey cement, is the leading player in the segment. The Aditya Birla group firm has 22 integrated manufacturing units, 27 grinding units, one clinkerisation unit and 7 bulk. Source: Economic Times

The Indian cement industry has been on a volume growth path led by several government initiatives and has a “bright” prospect for this financial year, said Chairman Kumar Mangalam Birla. The government’s spending on infrastructure projects and affordable housing schemes such as the Pradhan Mantri Awas Yojana (PMAY) with enhanced budgetary allocations will be the primary drivers of growth for the cement industry, said the latest annual report of the Aditya Birla group firm. “Cement demand is closely linked to the housing and infrastructure sector. The industry has been on a volume growth path, motivated by the government’s ‘Housing for All by 2022’ mission and large infrastructure projects in the pipeline,” said Kumar Mangalam Birla in his address to shareholders. Birla further noted that, “going forward, prospects for the industry in FY22 look bright.” Over the pandemic impacted FY21, Birla said though the cement industry witnessed de-growth of 10-12 per cent due to the COVID-19 pandemic, in the second half (H2FY21) it began to show signs of early recovery. “Lockdown-led demand disruption was the highest in Q1FY21 on account of suspension of production, stalled construction activities and mass exodus of labour. The total lockdown period from late March to end-April 2020, was a huge challenge for all manufacturing industries,” Birla said. encouraging


• In a national workshop conducted with global industry experts, the company expressed its interest for long-term collaboration with cement industry players on opportunities of using fly ash, a by-product in thermal power generation, and bauxite residue in cement manufacturing.

Vedanta invites partnership from cement companies for by-products

cement industry. “We hope the Indian cement producers come forth to work with us on this innovative solution, which is a true win-win scenario for the industry and environment,” Rahul Sharma, CEO (aluminium business) of Vedanta, said during a webinar. cement and concrete manufacturing, providing cement manufacturers significant benefits in terms of quality output, cost and sustainability. Fly ash can partially replace cement in concrete (or be used to produce blended cement), significantly improving durability and workability of cement. With a 30-33 per cent blending ratio, fly ash can help save 270 kg of carbon emissions for every tonne of cement produced. Bauxite residue can be added to the raw mix in clinker manufacturing to replace virgin bauxite, improving its hydraulic properties and strength. Owing to high concentration of iron oxide and alumina, bauxite residue is a better substitute for laterite, used in clinker manufacturing. Moreover, the residual caustic in bauxite residue helps in controlling the emission of sulphur when used directly, making it a better fit for the purpose. Both fly ash and bauxite residue being industrial wastes themselves, come with significant cost and energy advantages as well economy partner for Vedanta Aluminium, it said. Source:Economic Times

Vedanta said its aluminium vertical has invited partnerships from cement producers like ACC, to use its by-products for manufacturing low-carbon cement. In a national workshop conducted with global industry experts, the company expressed its interest for long-term collaboration with cement industry players on opportunities of using fly ash, a by-product in thermal power generation, and bauxite residue in cement manufacturing. “Vedanta aluminium business...invites partnerships from cement producers for using its by-products for manufacturing low-carbon cement,” the company said in a statement. The cement industry, which is exploring viable solutions to produce cement more sustainably, is the perfect circular “Long-term strategic collaborations, such as between Vedanta and India’s key cement producers, will not only eliminate significant volumes of industrial waste from the system, but also provide the trifecta of quality, sustainability and cost benefits for the


Reports for August 2021

J. M. Baxi & Co. Monthly Agri Products Update

J. M. Baxi & Co. Monthly Automotive Logistics Update

J. M. Baxi & Co. Monthly Cement Update

J. M. Baxi & Co. Monthly Chemical Update

J. M. Baxi & Co. Monthly Coal Update

J. M. Baxi & Co. Monthly Container Update

J. M. Baxi & Co. Monthly Cruise Shipping Update

J. M. Baxi & Co. Monthly Edible oil and Extractions Update

J. M. Baxi & Co. Monthly Fertilizer Update

J. M. Baxi & Co. Monthly LNG & LPG Update

J. M. Baxi & Co. Monthly Mineral and Metal Update

J. M. Baxi & Co. Monthly Oil and Petroleum Update

J. M. Baxi & Co. Monthly Port Update

J. M. Baxi & Co. Monthly Project Cargo Update

J. M. Baxi & Co. Monthly Seafarers Insights Update

J. M. Baxi & Co. Monthly Steel Update


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Cement Update