India’s Cement Industry

The second largest cement producer in the world, India’s cement industry is one of the most vital part contributing to its economy, employing over a million people. The industry has managed to capture huge investments since its liberalisation in 1982.

The country’s potential of infrastructure and construction development makes the cement industry largely benefit from it. The sector also expects a major boost out of many new initiatives like the recent development of 98 smart cities.

Foreign players like Heidelberg Cement, Lafarge-Holcim and Vicat have invested in the sector in recent past. India’s substantial growth factor goes to the ready availability of the raw materials for making cement.

More recently in June, India’s core sector recorded a 6.7% growth rate with the cement production showing the best growth, increasing by 13.2% over last year. Industrialist Kumar Mangalam Birla had also recently commented on the cement industry saying that it has seen a demand pick-up of late. He said that the industry is likely to do good this year after the government’s push towards infrastructure development.

The cement industry was also recently in news when the stock market recorded expensive cement stocks, exceeding the typical valuation range.

Below are the names of cement companies that dominate the industry, contributing to the country’s overall GDP.

  1. UltraTech Cement

Image result for ultratech cementEstablished in 1987, India’s largest cement manufacturer UltraTech is present in 5 countries. The industry pioneer in cement production, UltraTech is also India’s largest clinker exporter.

The company’s standalone profit for the June quarter recorded a 32.9% decline YoY to ₹598.39 crore. Reports said that the decline was due to dismal margin performance. Nonetheless, the company’s revenue grew 30.6% to ₹5,655 crore. “Sales volume in Q1 jumped 34% to 16.8 million tonnes YoY,” UltraTech had stated in its filing.

Headquartered in Mumbai, the company operates 15 grinding units, 11 integrated plants, 101 ready mix concrete (RMC) plants, two rail and three coastal terminals along with one clinkerisation and white cement plant.

  1. Shree Cements
Image result for shree cement
Photo: Twitter

India’s northern and eastern part of the cement industry is highly dominated by the trusted brand of Shree cements. The company was established in 1970 and operates across six states over north and east India.

The company also recently announced on setting up a 3Mta cement grinding unit at Chandrabali village, Shyampura, in Cuttack district of Odisha. The project is also expected to provide employment to 243 people. Shree cement also won the coal linkage for its Raipur plant. The company paid a winning premium of ₹130 per ton.

Shree Cement is known as the efficient and environment friendly companies in the world. It is headquartered in Bangur Nagar, Ajmer, Rajasthan

  1. Ambuja Cements

Image result for ambuja cementDominating the western India, Ambuja Cements was founded in 1983 and is headquartered in Mumbai. The company recently recorded better that expected results in its second quarter. Ambuja cement’s stock climbed as much as 7% to ₹222.95, its highest since May 10.

The company’s net profit rose 27% at ₹499 crore against ₹392 crore in the previous year. The analysts had expected the net profit to be ₹310 crore. On a consolidated basis however, the company recorded a fall of 5% in combined net profit at ₹684 crore. The reason behing the fall was largely due to lower realisation and fall in contribution from its subsidiary ACC, according to reports. The operations revenue also fell at 5% at ₹6,835 crore.

The major cement producing company is also a part of global conglomerate Lafarge. Ambuja Cement has a cement capacity of 29.65 million tons which includes 8 cement grinding units and 5 integrated cement manufacturing plants across the country.

  1. ACC

Image result for acc cementHomegrown cement maker ACC is the first Indian cement company that started Bulk Cement for large consumers. Established back in 1936, the company is headquartered in Mumbai. The company recently posted a surge of 13%, its biggest since 2008.

According to recent reports, the profits of the company increased from ₹326 crore last year to ₹328 crore. The revenue from operations fell to ₹3,768 crore from ₹3,818 crore last year although the volume recorded a 7% growth. The net sales of the company rose by 37% at ₹3,768 crore. Additionally, the operating EBITDA (Earnings before interest, tax, depreciation and amortization) increased to ₹669 crore.

ACC Limited has over 50 ready mixed concrete plants along with 17 modern cement factories. The company is known for is innovation and product development while it also offers special consultancy services.

  1. Binani Cement

Binani cement, a flagship company of the Braj Binani Group, operates the production of ‘Pozzolana Portland Cement’ (PPC) & ‘Ordinary Portland Cement’ under its brand.

Binani cement has been making rounds in the news for its insolvency case. UltraTech cement had asked to buy the company’s 98.43% stake if the insolvency case was dropped. Debt ridden Binani cement asked The National Company Law Appellate Tribunal (NCLAT) to terminate the case and it will pay off its creditors. On 15 may, NCLAT refused to stall the insolvency process. Other bidders were involved in the case as well.

The company was established in 1996 in Mumbai and has a significant market share in northern and western regions of India.

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