India Cement & Construction Materials (vol 1 / issue 6) by CemWeek

india CemWeek A CemWeek Publication

Cement VOLume 1

issue 6

may/june 2012

& construction Materials

Cement Exports

Rising Beyond Borders Q&A with A. Agarwal Binani Cement

Inland Waterways

Growing Market or Fading Fast?

Emphasis on Transport Alternatives

Lure of Africa

Increased interest & investment News

Analysis

Market Coverage

Interviews

People

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FEATURES 4 12 18

DEPARTMENTS

EXPORTS: GROWING OR FADING FAST? Looks at the long-term sustainability of exporting for the industry

THE LURE OF AFRICA Examines the industry’s increased interest and investment in Africa A Q&A with Alok Agarwal, Sr. ED of Marketing & Strategy, Binani Cement

AWAITING THE OUTCOME

CIVIL ENGINEERS FIND SAVINGS WHERE THE RUBBER MEETS THE ROAD

Cement performance: details and analysis

PROFILES

ANALYST RECOMMENDATIONS

Rain Cement: A Self-Sufficient Cement Manufacturer Highlights of the latest in broker recommendations

STOCK PERFORMANCE Comprehensive data on major cement companies in India

cement

A new study shows the effects on fuel consumption from pavement deflection under vehicle tires

PORT EXPANSION NEEDED, BUT IS IT LIKELY?

INCREASING EMPHASIS ON INLAND WATERWAYS The push to increase IWT could greatly benefit the industry with regard to transportation

construction & building materials

NUMBERS IN BRIEF

Golden Opportunities

Cement companies await the outcome of the CCI’s year-long investigation

Can the country’s ports handle the projected growth in container operations

EDITOR’S LETTER

RISING BEYOND BORDERS

FOCUS

INFRASTRUCTURE & PROJECTS Jammu & Kashmir set to get the Patnitop Tunnel road project, the country’s largest tunnel

EQUIPMENT UPDATES New products launched by several manufacturers including Volvo, Caterpillar and XCMG

MARKET AND COMPETITION Cement stock prices take a hit ahead of CCI report

VOLUME AND PRICING Cement sales slowed in April due to a lack of demand and labor

M&A and FINANCE UltraTech in negotiations to buy limestone mine and cement plant

PROJECTS AND EXPANSIONS

PEOPLE

REGIONAL UPDATE

Work on Wonder Cement’s new production line underway Resignations of directors at HeidelbergCement and UltraTech Update on cement markets in the broader South Asia region

Cement & construction Materials

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letter from the editor

Golden Opportunities ndian business has turned its eye further abroad in search of its next frontier of growth and expansion. It is an inevitable step for many industries, including cement, that continue to mature and that have witnessed growing domestic competition in an already crowded marketplace. Increasingly, Indian cement companies are either setting up operations or exploring growth opportunities in all corners of the globe. Many Indian cement manufacturers have already taken the next step of expanding globally, and they will obviously be faced with new challenges. Political dynamics, intricate laws, local tax codes, and different languages will pose risks to those who venture forth into new regions. However, those manufacturers able to balance the risks and rewards will certainly benefit from this push for increased global investment and trade. Thus, as Indian cement companies continue growing and reaching their potential, golden opportunities are likely to be discovered and embraced.

In this issue, we turn our attentions to the increased interest by Indian cement manufacturers in the region of Africa with the feature “The Lure of Africa.” Cement manufacturers are adding capacity here rapidly. Whether that will prove to be a risk worth taking, though, only time will tell. Cement exportation has featured on the minds of a few cement manufacturers recently as well as of the Indian Work Group on the Cement Industry. It is also a topic we examine more closely in the feature story “Exports, Growing or Fading Fast.” In addition to our regularly featured departments, we include a Q&A with Alok Agarwal, Senior ED of Marketing and Strategy of Binani Cement. Mr. Agarwal shares his insights into the company’s expansion efforts abroad as well as domestically. Global expansion and the move toward risk diversification and capital portfolio man-

agement is becoming increasingly more relevant in the Indian cement industry, and it is why ICCM, and our parent company the CW Group, supports the upcoming GMI Forum’s “Cement Business & Investment (CBI) India 2012” event in Mumbai on October 10 and 11, 2012. This conference, which will bring together global and Indian experts, is a must-attend event that will focus on these important issues and others. We hope that you will join us in sharing the successes of your company. As always, we welcome your input. If you are interested in contributing to the ICCM magazine with an article or simply want to share your feedback, contact us at editor@cemweek.com.

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numbers IN BRIEF Soft April still shows YoY growth Demand and supply Cement demand improved in February, climbing 10.2 percent to 20.5 million tons, up from 18.6 million tons for the same period in the previous year. Sales growth continued into March, rising 7.3 percent YoY while April YoY demand trended slightly lower at around 6.1 percent. Month over month sales contracted over 14 percent in April, dropping from the roughly 22.6 million tons recorded in March to 19.4 million tons. Volumes increased 10.2 percent from 20.40 million tons in February 2012 to 22.48 million tons in March 2012, which was also 6.2 percent higher from 21.17 million tons in March 2011. However, output dipped 10.7 percent to 20.07 million tons in April 2012 but did 8.7 percent better than the 18.47 million tons in April 2011. Prices In the northern region, prices improved by Rs 10 to 15 in April, but declined by Rs 5 in May following muted demand. The ban on sand mining in Rajasthan was noted as a primary cause for the decline. The central region was hit with a 20 percent freight hike announced by the Indian railways. As a result, cement prices revised upwards by Rs 20 to Rs 25 in April, which was soon followed by another price hike of Rs 5 in May in the wake of frenzied construction work after the recent elections. The eastern region witnessed a hike of Rs 5 to Rs 10, hovering at Rs 310 in April due to severe logistical problems that affected cement supply at a time of increased demand. The combination of poor transportation problems and rising demand led to another round of hikes, bringing cement prices to Rs 315 in May. With elections around the corner and a spate of infrastructure and housing projects lined up in the western region, demand picked up in Gujarat, causing prices to increase by Rs 25 in April only to be rolled back by Rs 5 in May as a labor shortage and lack of sand affected construction schedules. The southern region witnessed its first ever hike in many months. While prices revised upwards by Rs 10, production discipline and improved demand may keep prices firm in May.

ALL-INDIA CEMENT DEMAND Reported cement volume 25

2011-12 (tons)

2010-11 (tons)

2009-10 (tons)

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Mar

Apr

2010-11 (tons)

2009-10 (tons)

Jan

ALL-INDIA CEMENT SUPPLY

Reported cement volume

2011-12 (tons)

Jan

Feb

Mar

Apr

PRICES (INR / bag) 350

South

West

East

Central

North

300

250 Jan

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feature

Exports Growing or Fading Fast?

The cement export market has shrunk in recent years, declining from a peak of 10 million tons to around 4.6 million tons as domestic demand has barreled ahead. The depreciation of the rupee and a lull in domestic demand has a few manufacturers eyeing export opportunities more seriously, but will the potential obstacles and fickle demand from importing nations prove to challenging for others to follow suit?

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feature he Indian cement industry has come a long way with regard to exporting. In FY 1989-1990, the industry was exporting only 0.16 million tons, but by FY 2004-2005 the 10 million tons threshold had been crossed. That level appears to also have been the peak as manufacturers have struggled to keep up with domestic demand in India, which has been easier to capture. In the years that have followed, there has been a persistent downward trend in the export of cement and clinker. The question on the minds of many is: Is the trend reversible? Changing Export Market The face of the export market continues to evolve. Countries that in the past were major importers of Indian cement, such as Iraq, Qatar, the UAE and Yemen, have reduced cement import levels for various reasons in recent years. Some have increased domestic supply capacity—in some cases dramatically—while others, suffering from the global economic meltdown, have simply watched demand dry up. Fortunately, new export markets like Sri Lanka, the Maldives, and Madagascar have emerged as strong economic growth has spurred frenzied infrastructure spending. Yet even these are facing increasingly intense competition from other regional exporters, such as Pakistan. Nepal has remained India’s strongest importer of cement over the last few years; however, even those levels have begun to decline. Significant growth in its own domestic cement production capacity has meant less need for cement imports. While it had historically imported around 80 percent of its cement needs from India, Nepal expects to reduce that dramatically in the next two years provided demand remains at current levels. With over 51 percent of India’s total cement exports destined for Nepal, the blow will be significant unless new markets can be developed to offset the loss. Over the last few months, several Indian cement firms have signaled they would like to increase exports. The depreciation of

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Total Cement Export (million tons) 12

2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

Source: Report on the Working Group on Cement Industry for XII Five Year Plan

Percentage of Total Exported Cement by Importing Country 60% 2008

2010

2009

30%

0.0

Nepal

Sri Lanka

Iraq

Maldives Madagasgar

Yemen

Qatar

Iraq

UAE

Sources : ITC calculations based on Ministry of Commerce & Industry statistics

the rupee and the lull in domestic demand has companies like ACC and Bharathi eyeing potential export markets more closely. Reports indicate that ACC is targeting the Maldives, Mauritius and Bangladesh, and Bharathi Cement, along with UltraTech and Holcim, are exporting to Sri Lanka in growing quantities.

given its continued reconstruction efforts following the end of its civil war; however, given the level of recent developments within its own domestic cement sector and plans by several cement manufacturers to build new plants, maintaining a strong export market over the mid- to long-term may prove challenging.

Both Bangladesh and Sri Lanka appear to be promising markets, provided a longterm relationship could be cultivated. Indian cement manufacturers may have the advantage in Bangladesh because of the current demand supply gap within the country, its lack of quality limestone reserves, and its potential proximity to the market. Additionally, Sri Lanka, at least in the short-term, remains promising

Growing the Export Market With approximately 300 small and 130 large cement plants operating in India, with an installed capacity of around 234 million tons and aggregate production capacity of roughly 167 million tons, the government finds itself having to import cement from neighboring countries like Pakistan in order to avoid delays in construction. Thus, there is a certain irony

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few years ago, Binani Cement secured a 49 percent stake in a clinker manufacturing plant in the Shandong province of China in order to sell cement in East Africa. Similarly, a portion of the capacity in the company’s Dubai operations could be earmarked for export. Another avenue being explored by Binani Cement is through the development of Greenfield projects that would benefit exportation. One example of this is the memorandum of understanding Binani signed with the Gujarat government to set up a 610 MW power plant, a cement factory and a captive jetty.

in seeing India’s import market grow at the same time there is renewed interest in exports, but location has a huge impact on both the country’s import and export markets and their growth. Cement exports are projected to range from two to three percent of domestic production, according to the most recent report by India’s Working Group on the Cement Industry. More optimistic estimates suggest it could reach five percent, but that may be difficult to achieve unless some significant incentives are offered and potential roadblocks are addressed. Competition from Pakistan and China remains a major concern to the growth of India’s export market, as does the limited number of regional markets available to receive exports. Sri Lanka, Nepal and

Bangladesh are popular, but other markets within the Middle East and parts of Africa are not as competitive given freight costs. Then there is the always-present issue of neighboring countries like Pakistan that are struggling with what to do with their own overcapacity. In Pakistan, local installed capacity is around 44 million tons, whereas cement demand stands at around 31 million tons, including 30 percent export and 70 percent local demand. Pakistani cement operators are therefore in need of somewhere to dump 10 million tons of surplus stock, and India is an attractive option. One option for generating more exports for India would be to partner with cement and clinker facilities in other countries to reach additional markets. For instance, a

The Indian Working Group on the Cement Industry has proposed several recommendations in the most recent five year plan (2012-2017) in order to increase the competitiveness of India’s cement in the global market. These proposed incentives include: ■■ ■■

■■ ■■

■■

Changing the rail freight classification from the current 150 to 140. A 50 percent freight subsidy for cement/clinker logistical costs up to the port/jetty from the manufacturing unit—an attractive subsidy considering most plants are located inland. An exemption for cement/clinker exports with regard to customs/port/ bunker charges. Encourage more investment in private ports/jetties and allow for those investments in such assets to be depreciated at a higher rate. Exemption from the royalty on limestone for cement exports.

DRY BULK GOODS SHIPPING RATES (AVERAGE MONTHLY BDI) 12,000

6,000

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feature

...the likelihood of other companies focusing their attentions on growing that market seems negligible at present.” “

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Include the royalty of limestone in the Duty Drawback Rates. (It should be noted that the royalty on limestone constitutes roughly 3.5% of cement and 5% of clinker value.) An exemption, or even inclusion, in the Drawback would go a long way toward boosting the cement industry’s competitiveness abroad.

Up in the Air In theory, the potential for India to tap into cement markets in neighboring regions is strong thanks to the sector’s world-class cement quality, utilization of the latest technology, convenient location, and large-scale limestone and coal deposits. The high costs associated with exporting such a low value/high volume product remain a concern that the recommendations of the Working Group may help to address. Likewise, freight costs are trending low, although if that changes, the rush to export may cool. Other issues may also surface, ranging from logistical to demand concerns. For example, by diverting supplies away from the domestic market, would manufacturers potentially risk the ire of customers already complaining of higher prices? In addition, how would the current shortage of terminals affect manufacturers’ ability to increase exports? Then there is the problem that most cement companies do not have effective port access. All of these are valid concerns that must be addressed, if the export market is to grow as projected. Until that time, the export market may be viable for a select few, but the likelihood of other companies focusing their attentions on growing that market seems negligible at present. BMWeek CemWeek BMWeek BMWeek

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THE SHIFT FROM WEST TO EAST:

HARNESSING THE POTENTIAL CEMENT INVESTMENT IN INDIA AND BEYOND round 200 CEOs and industry stakeholders will assemble in Mumbai, India, to attend the 1st Cement Business & Industry India (CBI India) 2012 Conference on the 10th and 11th of October 2012. This is an international event with a unique focus on India’s cement sector that will emphasize the critical executive, investment, technology and fuel issues facing the sector. The conference will also take a closer look at Indian’s growing role in the international markets as companies expand globally through acquisitions, greenfield units and exports as well as technological updates and best-practices.

“A new forum is needed in India to critically look at the industry’s issues. Not just as the ‘conference engines’ do today, but as industry analysts and technologists to build a real and insightful dialog, from the CEO down. The CBI event is set to become a forum of choice to hone competitive insights, form new business relationships and shape the industry agenda,” said Mr. Robert Madeira, Managing Director and Head of Research at the CW Group, the parent of CemWeek and owner of the India Cement & Construction Materials journal.

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The two day interactive program, which is organized by US-based GMI Global, supported by CemWeek and India Cement & Construction Materials, will cover key aspects of India’s cement industry. Sessions will center on the principal issues facing the Indian cement sector today and in the future. In particular, industry leaders will take a closer look at the evolution and direction of the market, balance views on the ever critical fuel sourcing situation, new policies and legislation, infrastructure plans, and technology maximization.

CBI India attendees will include not only cement companies but also investors, bankers and advisors, fuel traders and suppliers, engineering organizations, among many other constituents. The conference will include over 25 presentations by industry experts and government officials, a CEO led panel discussion, various networking breaks, an exhibition, lunches, cocktail reception, and a gala dinner. BMWeek BMWeek BMWeek

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update recommending further action against companies it considered to be in collusion with regard to production and supply manipulation. By that time, the list of manufacturers accused of cartelization had grown significantly.

Competition Commission investigation:

Awaiting the Outcome Indian cement companies await the final report from the CCI regarding its year-long investigation into cartelization claims. Investors, fearing strong financial penalties, contributed to industry-wide falling stock prices in Aprilâ&#x20AC;&#x201D;a trend that is likely to continue into May. The Competition Commission of India (CCI) ended hearings in March involving nearly 40 cement companies accused of cartelization. Now, all await the final report in a case that is likely to have significant ramifications not just for individual cement manufacturers but for the industry as a whole. This is not the first time that the cement industry has come under fire for claims of cartelization. The cement industry has been accused of cartelization many times in the past two decades, but the primary complaint leveled against cement companies, and management in particular, this time is that they under-utilized capacity to artificially create a cement shortage, thus hiking prices in a booming construction and infrastructure market. Long Standing Allegations These allegations of cartelization reach back to 2008 when the Serious Fraud 10

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Investigation Office (SFIO) first investigated allegations against ACC, UltraTech and Ambuja. However, the SFIO hand-off to the CCI appears to have been triggered by alleged production cuts by manufacturers that occurred between January and March 2011. Many companies during that time reportedly raised prices by as much as Rs 40 to 50/bag, but then in the months that followed, when demand particularly in the southern region weakened, prices remained high. The situation prompted a closer look by government officials, and the Ministry of Corporate Affairs (MCA) submitted a report in September 2011

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Cartelization Claims Denied Management at ACC, UltraTech and Ambuja, which together represent 50 percent of the cement market, have denied they had any hand in cartelization. They are quick to point out that cement pricing is simply part of the industry dynamic and that cuts in production were the result of low off-take. Given the capital intensiveness of the industry, cement manufacturers argue that it does not make sense for them to operate at 50 to 60 percent capacity utilization and that they were forced to do so because demand was low, resulting in production cuts. The CCI completed its year-long investigation in April 2012 and confirmed it found evidence of cartelization with regard to several issues. A final report is expected in May. Financial as well as criminal penalties against cement manufacturers are possible. Under the Competition Act, the CCI can impose a penalty of up to ten percent of average turnover of the past three years. Industry watchers estimate penalties will likely run between six and seven percent of total revenue for the period under investigation. If this occurs, it could potentially equal up to 50 percent of annual profits, which in turn will noticeably affect market caps. On news that a final report was expected, stock prices in April for cement manufacturers fell across the board, in some cases by as much as eight percent. Additionally, managers could face significant individual penalties. Under the Companies Act, managers found guilty could lose their Board positions and under the India Penal Code could face charges of criminal conspiracy, fraud or cheating, all of which carry potential jail time. BMWeek BMWeek BMWeek

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feature

The Lure of

africa

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More and more Indian cement firms are turning their eyes to Africa in search of growth opportunities. While the region is not unexplored territory for many Indian companies, it is providing new potential avenues for expansion for cement manufacturers. Still, it is not an easy-to-navigate opportunity as domestic companies and many other foreign operators continue to add capacity at a rapid rate.

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feature ocal Indian companies are looking abroad for opportunities. Bolstered by the growing economy, more cash in hand, increased competition and an often-crowded industry, more companies are looking outside of India to grow operations and to diversify holdings. While in the past the government has not been as supportive of Indian companies investing outside its borders with regard to capital and foreign exchange resources, this has begun to change as officials have begun to recognize the growth potential such investments will have for India’s own domestic market. To that end, the government has undertaken a slew of revisions that liberalize the norms of direct investment for Indians abroad and has sent a positive message regarding investing abroad. Additionally, through the Department of Industrial Policy and Promotion (DIPP), specific regional areas have been identified where the government will actively assist Indian companies with asset purchases and company buyouts. These areas include Southeast Asia, Eastern Europe and Africa. Outbound FDI has mirrored the growing interest in investing abroad. In 2010-11, outward FDI was US$43.92 billion, which was significantly higher than the US$17.98 billion in 2009-10 and US$17.14 billion in 2008-09. While outward FDI did decline in 2010-11 to US$30.86 billion, early signs indicate Indian companies are continuing to invest aggressively abroad in 2012. According to data from the Reserve Bank of India (RBI), outward FDI rose 38 percent in March to US$2.77 billion over the previous month. For many Indian businesses, including cement manufacturers, investing abroad is a sound growth strategy. In recent years, Indian cement manufacturers have expanded operations into neighboring Sri Lanka and even further afield into the UAE and China. Therefore, expanding into some African markets is not outside the realm of logic.

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INDIANS IN AFRICA (select cement production units)

3 5 6 4 African cement plants with Indian connection

1 2

New India-backed cement projects

Sanghi Industries, Sebit, Rift Valley Kenya (factory under construction) Lake Cement, Tanzania

WACEM, Mali

Fortia Cement, Togo

Diamond Cement, Burkina

Cement Ghana Diamond, Ghana

Long History Indian businesses have been investing in Africa for several decades. In the 1960s, Africa accounted for virtually all of India’s outward investments, and by the 1970s, India had established a presence in Kenya, Nigeria and Uganda. Today, Indian companies do business in over 20 African nations.

Regional Footprints Investments in Africa by Indian businesses can be found throughout the region. However, the level of investment has varied greatly, with the preference for funding endeavors in East Africa and, particularly, Mauritius. Indeed, over 70 percent of total inflows (1961-2007) to the continent from India have been in the East African region.

Over the last five years, Indian companies in Africa have made around 85 acquisitions and equity investments, investing US$50 billion in a wide range of sectors— including the cement industry—since 2005. Over the last decade, Indian cement companies have increasingly turned an eye toward expanding into Africa, establishing operations through a variety of means ranging from export market development to Greenfield projects to the use of terminal strategies.

Sanghi Industries elected to expand within this region, purchasing land in Kenya in 2010 to build a cement plant. The company, in collaboration with local partners, intends to build a 1.2 million ton facility at Pokot in the Sebit region. The company claimed to have received the proper environmental clearances as of December 2011 and was projecting the facility would be completed by the end of 2013.

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Banco Products is also eyeing the eastern region but has elected to go the acquisi-

For many Indian businesses, including cement manufacturers, investing abroad is a sound growth strategy. ”

“

tions route to establish itself. In 2010, the company acquired a 51 percent stake in Tanzania’s Lake Cement Company, which operates a 500,000 ton facility. Banco intends to invest US$65 million in expanding and upgrading the plant. Additionally, the company acquired 70 hectares of land rich in limestone deposits.

similar approach was envisioned with its Dubai operation and exportation to Tanzania and Kenya. Binani is also in the process of establishing a one million ton clinker plant in Mauritius, but since June 2011 the company has been awaiting environmental clearances to proceed with construction.

Binani Cement has had an eye on the East African market for some time. The company purchased a 49 percent stake in a clinker manufacturing plant in the Shandong province of China in 2007 with an eye to exporting cement to East Africa. A

The development of the oil and gas sector in North Africa has contributed to this region’s attractiveness, making it the second most active area for Indian investment overall. Meanwhile, past instability in West Africa has accounted for the low level of

investment in this region, with only eight percent of total Indian FDI. One of the earliest Indian cement companies to establish a presence in the West African region was the West Africa Cement Company (WACEM), which ventured into Mali with its purchase of Cement of West Africa (CIMAO) assets in July 1996. Today, WACEM operates under the Diamond Cement name and plans to invest more than US$130 million in building a cement plant at Astro Village Gangontierie, Circle of Bafoulabe. The plant is expected to produce 800,000 tons this year

Ciments et Materiaux du Mali, a competitor to WACEM. Courtesy of Vicat

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and hit one million tons by 2014. WACEM, owned by a Hyderabad-based group, also operates facilities in Togo (Fortia Cement), Diamond Cement (Burkina) and Cement Ghana Diamond (Ghana). In the past, southern Africa received the least amount (only 1.4%) of Indian investment dollars, but that appears to be changing. South Africa’s substantial natural resources, well-educated population, and large domestic market has some cement manufacturers, like the Birla Group and Shree Cement, scouting for potential assets to acquire, including those of recently onoffer Lafarge. Mozambique, another fast-growing economy, is drawing interest from UltraTech, Birla and Shree Cement, among others. In addition to recently discovered natural gas reserves, improvements to infrastruc-

ture and education, the country is rich in limestone reserves and high-grade coking coal, making it an attractive investment destination. Given Mozambique’s 2,400 kilometers of coastline, the potential for a cement manufacturer to build a cement clinker plant capable of exporting to grinding units in neighboring countries is an attractive bonus. This point has been recognized by a few Indian companies looking to build new plants, such as Aar Ess Exim. The company commissioned the construction of a 1,000 tpd plant for US$65 million in late 2009 in the province of Inhambane near Pambara. Others Indian companies are reportedly building new plants in the country as well. For UltraTech, expanding its operations into Mozambique may well go beyond just

acquiring new natural resources. In April 2012, reports surfaced that the company was in talks to acquire a large limestone mine in Mozambique’s southern Magude region near the capital of Maputo for roughly 1,500 crore. If those talks prove successful, the company may also elect to build a one to two million ton facility. The African continent continues to draw the interest of Indian cement companies with the capital and desire to expand abroad. Given the continent’s strong economic indicators and abundance of natural resources, the likelihood of more acquisitions, Greenfields and joint venture project announcements throughout the region are likely. While the potential payoff could be significant, navigating this new market, which is fraught with its own unique traits unfamiliar to newcomers, will be challenging. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek

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We know the cement industry well. Let us guide you. For more information please contact us at inquiries@cwgrp.com or on +1-702-430-17 48 848 N. Rainbow Blvd., Box #1658, Las Vegas NV, 89107, USA

leader q&a Q&A with Alok Agarwal, Sr Ed at Binani Cement:

Rising Beyond Borders

ICCM connects with Alok Agarwal, the Senior ED of Marketing & Strategy at Binani Cement. Mr. Agarwal provides insights into the company’s expansion efforts abroad as well as domestically. He also discusses Binani’s focus on Africa and its branding strategy. Cemweek: Binani was one of the first Indian cement companies to set up production sites in China and Dubai. Currently, you are present in the UK, Singapore, Dubai, China and Indonesia as well as in some African countries. How does your investment strategy differ with regard to investing in a growth market like India versus expanding abroad (i.e., why leave home if home is best)? A. Agarwal: Binani has its cement manufacturing operations in China and Dubai in addition to India and marketing offices in various African countries. The coun-

MAY/JUNE 2012

tries identified by Binani are emerging economies with good visibility of growth in cement demand. The strategy is to have a global footprint for its cement business, capturing economies which are projected to have growth requirements in terms of infrastructure development and housing needs. Cemweek: How does your expansion into eastern India support your goal of growing Binani’s export market? What is the current status of the plant project? A. Agarwal: The idea for the plant in East India is to be located near the port. The plant in East India, in addition to serving

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the domestic markets, will also serve the export markets of Bangladesh and Myanmar. Exports can also be undertaken to other Southeast Asian countries. The plant is currently in the conception phase. Cemweek: Africa is one of the key markets Binani is looking to expand its operations in, and exports are currently the vehicle of choice for doing so. Does the company have any future plans to undertake Greenfield plants in any of the African countries, or possibly expand through acquisition opportunities? A. Agarwal: Africa is on the priority radar of Binani due to its enormous potential

...Binani has worked to reposition itself as a brand with global ambitions and qualities.”

“

for growth. Currently, the market is being explored through exports. In the future, depending on the understanding of the market, we would be open to Greenfieldprojects and /or acquisitions in that region.

Cemweek: Binani’s plan to build a clinker grinding and packaging plant in Mauritius encountered a few administrative delays over the last year. Can you provide an update of the progress of this project?

a strongly rooted, domestic brand. However, in the last couple of years, Binani has worked to reposition itself as a brand with global ambitions and qualities. Has this campaign proven successful?

Cemweek: Do you still see growth opportunities in Africa despite the recent and rapid expansion by Chinese and regional companies in that region?

A. Agarwal: The project continues to be pursued by the group.

A. Agarwal: The group aspires to be present in key economies growing beyond the domestic market, which has been demonstrated by the recent acquisition of 3B in Europe. The branding campaign is targeted to reflect an Indian brand moving into the global arena, “rising beyond borders.” BMWeek

A. Agarwal: The resource richness of Africa, the expected change in demographics, the increase in labor productivity and urbanization, and the huge unmet infrastructure need—all point towards the fact that a lot of scope for growth exists. To quote the World Bank, “Africa could be on the brink of an economic takeoff much like China was 30 years ago and India 20 years ago.” Challenges exist, coupled with possibilities. Moreover, India has been a traditional business partner of Africa in the past.

Cemweek: With regard to marketing, product differentiation through branding remains key. Many Indian companies have focused on portraying their brand as

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MIT Department of Civil & Environmental Engineering:

Civil engineers find savings where the rubber meets the road Study shows that pavement deflection under vehicle tires makes for a continuous uphill drive that increases fuel consumption.

Denise Brehm, MIT Dept. of Civil and Environmental Engineering

A new study by civil engineers at MIT shows that using stiffer pavements on the nation’s roads could reduce vehicle fuel consumption by as much as 3 percent—a savings that could add up to 273 million barrels of crude oil per year, or $15.6 billion at today’s oil prices. This would result in an accompanying annual decrease in CO2 emissions of 46.5 million metric tons. he study, released in a recent peer-reviewed report, is the first to use mathematical modeling rather than roadway experiments to look at the effect of pavement deflection on vehicle fuel consumption across the entire U.S. road network. A paper on this work has also been accepted for publication later this year in the Transportation Research Record. By modeling the physical forces at work when a rubber tire rolls over pavement, the study’s authors, Professor Franz-Josef Ulm and PhD student Mehdi Akbarian, conclude that because of the way energy is dissipated, the maximum deflection of the

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load is behind the path of travel. This has the effect of making the tires on the vehicle drive continuously up a slight slope, which increases fuel use. The deflection under the tires is similar to that of beach sand underfoot: With each step, the foot tamps down the sand from heel to toe, requiring the pedestrian to expend more energy than when walking on a hard surface. On the roadways, even a one percent increase in aggregate fuel consumption leaves a substantial environmental footprint. Stiffer pavements—which can be achieved by improving the material properties or increasing the thickness of the asphalt layers, switching to a con-

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crete layer or asphalt-concrete composite structures, or changing the thickness or composition of the sublayers of the road —would decrease deflection and reduce that footprint. “This work is literally where the rubber meets the road,” says Ulm, the George Macomber Professor in the Department of Civil and Environmental Engineering. “We’ve got to find ways to improve the environmental footprint of our roadway infrastructure, but previous empirical studies to determine fuel savings all looked at the impact of roughness and pavement type for a few non-conclusive scenarios, and the findings sometimes differed

by an order of magnitude. Where do you find identical roadways on the same soils under the same conditions? You can’t. You get side effects. The empirical approach doesn’t work. So we used statistical analysis to avoid those side effects.” The new study defines the key parameters involved in analyzing the structural (thickness) and material (stiffness and type of subgrade) properties of pavements. The mathematical model is therefore based on the actual mechanical behavior of pavements under load. To obtain their results, Ulm and Akbarian fed their model data on 5,643 representative sections of the nation’s roadways taken from Federal Highway Administration data sets. These data include information on the surface and subsurface materials of pavements and the soils beneath, as well as the number, type and weight of vehicles using the roads. The researchers also calculated and incorporated the contact area of vehicle tires with the pavement. Ulm and Akbarian estimate that the combined effects of road roughness and deflection are responsible for an annual average extra fuel consumption of 7,000 to 9,000 gallons per lane-mile on high-volume roads (not including the most heavily traveled roads) in the 8.5 million lane-miles making up the U.S. roadway network. They say that up to 80 percent of that extra fuel consumption, in excess of the vehicles’ normal fuel use, could be reduced through improvements in the basic properties of the asphalt, concrete and other materials used to build the roads. “We’re wasting fuel unnecessarily because pavement design has been based solely on minimizing initial costs more than

performance—how well the pavement holds up—when it should also take into account the environmental footprint of pavements based on variations in external conditions,” Akbarian says. “We can now include environmental impacts, pavement performance and, eventually, a cost model to optimize pavement design and obtain the lowest cost and lowest environmental impact with the best structural performance.”

ments. And the state departments of transportation would save money while reducing their environmental footprint over time, because the roads won’t deteriorate as quickly.” This research was conducted as part of the Concrete Sustainability Hub at MIT, which is sponsored by the Portland Cement Association and the Ready Mixed Concrete Research & Education Foundation with the goal of improving the environmental footprint of that industry. “This work is not about asphalt versus concrete,” Ulm says. “The ultimate goal is to make our nation’s infrastructure more sustainable. Our model will help make this possible by giving pavement engineers a tool for including sustainability as a design parameter, just like safety, cost and ride quality.”

The researchers say the initial cost outlay for better pavements would quickly pay for itself, not just in fuel efficiency and decreased CO2 emissions but also in reduced maintenance costs. “There’s a misconception that if you want to go green you have to spend more money, but that’s not necessarily true,” Akbarian says. “Better pavement design over a lifetime would save much more money in fuel costs than the initial cost of improve-

“This MIT research pioneered a rigorous mathematical framework relating fuel consumption with mathematically predicted pavement deflection. This framework lays a foundation for continued development and future improvement of advanced pavement-vehicle interaction models,” says Lev Khazanovich, a professor of civil engineering at the University of Minnesota who was not involved in this research. “Integration of the results of this study with the Mechanistic-Empirical Pavement Design Guide recently adopted by the American Association of State Highway Transportation Officials will enable transportation agencies to account for traffic fuel consumption in pavement design decisions. This makes Akbarian and Ulm’s research especially important today in light of the efforts of transportation agencies to reduce the environmental footprint of the transportation system.” BMWeek

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Port Expansion Needed, but Is It Likely? India’s coastline is currently home to 12 major ports and approximately 187 minor ports which act as important hubs with regard to the sub-continent’s trade and export industries. Seaborne-trade represents around 80 percent of India’s total exports and the amount of cargo handled by all of the ports has risen steadily in the last six years. The India Port Association notes that, along with these increases, the country is also expected to become a major destination for container operations, which could do even more to increase the growth in port operations. However, the question on the minds of many is whether the country’s ports can handle such growth. 22

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announced their participation. JSW, Aditya Birla, Essar Shipping Ports and Logistics, Sembmarine Kakinada Limited, Tuticon Port Trust and Adani Group are just a handful of those investors announcing plans to invest in the development of the country’s port system. In order to cope with the demands placed by trade in India, the country will need to ensure that its ports can handle an annual capacity of over three billion tons. According to the planning commission associated with the proposed expansion efforts, an investment opportunity of US$25 billion by 2011-12 is expected as the country seeks to double its port capacity. OBSTACLES TO OVERCOME Several impediments still lie in the way of the Indian government in terms of executing their port expansion plan. The uncertainty of acquiring funds from private sources is the largest hurdle, but there are other factors to be taken into account.

s India becomes a major player on the stage of world trade, the country’s ports and terminals are seeing an urgent need for infrastructure and capacity development. These major ports play a key role in external trade, as roughly 95 percent by volume and 75 percent by value are carried by sea. Therefore, the further development of the port and shipping industry is viewed as critical to not only maintain current trade levels but in anticipating future growth. According to India’s Ministry of Shipping, the country’s total annual cargo traffic is on course to reach 2,495 tons by 2020. This is a substantial increase when compared to the numbers generated at present. It also means that existing ports will be unable to handle the increase. Aware of this, the government has planned several port pro-

jects. In the current fiscal year, the government has identified 23 port projects that could expand capacity by 236.63 million tons a year for an estimated investment of Rs 16,743.92 crore. Unfortunately, the government as of January 2012 had only awarded one of the 23 proposed projects. PRIVATE PARTICIPATION The federal government is relying heavily on major contributions from public-private partnerships to carry out its expansion efforts for major port projects while it advocates that state-governments take the reins with regard to the development of non-major ports. Private participation and investment will be necessary if the appropriate changes are to be made to the country’s port systems. Several private groups have already

Likely partners in the shipping industry that could have been tapped for investment have faced problems of restricted cash-inflow and are still trying to recover from the global economic slowdown. Then there is the actual construction issue with which to contend. The failure of the government to award key projects in a timely manner has not only increased the likelihood of cost and time overruns, but it has led to a loss of efficiency and the opportunity such projects could bring to supporting industries such as cement. Despite the possible factors working against India and its development of the ports systems along the coast, the government and several private corporations appear committed to moving forward with their efforts to expand the system. If all goes as planned, the shipping and subsequently the export sector in India could become an even greater force to be reckoned with in terms of the global economy. BMWeek CemWeek

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Increasing Emphasis on Inland Waterways Could Benefit Cement Industry Multi-modal logistics, cost control and safety stand to gain

ndia is dramatically increasing its development of inland waterways transport (IWT) in a move that could have significant benefits for the cement industry. With the cost of shipping by rail and road on the rise, cement manufacturers need to find a way to manage logistics expenses, and despite the development boom, India's government still needs viable alternatives to crowded roadways. The result is an emerging opportunity for the cement industry to take advantage of India's extensive inland waterways. The current IWT network stretches 14,500 km across the country from the hinterlands to the coast. Not all of the network is navigable for larger barges and vessels, which require a minimum depth of two meters. However, more than 5,700 km are navigable by mechanized boat at least 330 days a year. This large waterways network was once a thriving transport system for India in the 18th and 19th centuries. In the 20th century, the country's emphasis shifted to roads and rails as a means of moving goods. As of 2008, inland waterways represented just 0.34 percent of total inland cargo movement. While the cement industry does move an estimated two percent of its total shipping over the water, it is a far cry from the past and the potential future of India's waterways system.

24 MAY/JUNE 2012

Moving Off Road Moving bulk freight and goods off the roads and rails isn't just a throwback to India's old methods of getting things done. It's also a jump to catch up with neighboring countries and other developed economies who use inland waterways as a cost management and logistics control strategy. Bangladesh, for example, moves 32 percent of its freight over inland waterways, while Germany maintains a 20 percent freight usage rate over the water. This is a boon to cargo intensive industries like the cement sector, as waterways can handle large single loads of 100 tons or more where roads and rails require multiple carriages. In many ways, IWT is significantly cheaper, more environmentally friendly, and more energy efficient than overland transport when moving cement. One liter of

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fuel can move 24 tons/km by road; 85 tons/km by rail; and 105 tons/km by IWT. Looking at it from an energy angle, one HP can move approximately 150 kg over roadways, 500 kg by rail and 4,000 kg by IWT. Both of these measures show the cost savings that are available, and in addition to lower transport bills, IWT also significantly reduces noise and air pollution. There are also the hard to quantify savings in disruption times and safety incidents for Indian cement firms. At the height of the rainy season, flooding often disrupts or destroys transport systems in rural manufacturing and raw material sourcing areas. IWT doesn't stop; the heavier inflows even help with areas that are too shallow for mechanized transport in other times of the year. The waterways are also safer yearround than roads, preventing accidents

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that can cause supply chain interruptions, product loss and unnecessary loss of life. Managing Development The many benefits of IWT are already available in some areas, but other areas face a sharp need for development. The Inland Waterways Authority of India (IWAI) is in charge of the country's national waterways, of which three are open and one is scheduled to open in 2013. The remaining waterways are managed by each state. Both systems link to each other, and both lag behind demand for shipping infrastructure.

11th Plan (planned)

For example, in the Northeast region, IWT routes are shorter and faster than overland routes in certain sectors, allowing both cost and time savings for cement transport. In Goa, West Bengal, Assam, Mumbai and Kerala, organized IWT systems supplement the national waterways for smooth cargo transfers from production sites to export opportunities. Links with neighboring waterways systems in Bangladesh also allow some cement firms to minimize transfer points in export sales. It all adds up to bottom line advantages for switching away from rails and roads.

The 11th national plan calls for steps to increase India's IWT use to two percent of all inland cargo by 2025. Cement makers are well-positioned to find significant logistical benefits in helping to meet this goal. With the lower energy costs, lower environmental impact and greater availability of safe transport year-round, IWT routes save money, save time and fight pollution. It may seem like a throwback to the ways of old, but in this case, India's inland waterways provide a tried-and-true solution to heavy cargo needs. BMWeek CemWeek BMWeek BMWeek

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Capacity development is the biggest issue. The use of IWT is limited by the availability of suitable vessels and barges, manual technology in the terminals for loading and unloading, and the lack of 24/7 support for logistical operations along the routes. With the fixed routes of waterways, there is also a need for some road and rail linkages at each terminal point to allow for more cargo connection. However, these are known issues with funded national development plans in place, as well as private ventures to get more boat capacity and automated loading systems installed. Maximizing Benefits For the cement sector to maximize its benefits with IWT, the key is developing multi-modal logistics systems. This helps link together road, rail and water transport options to move cement to projects, buyers and export sites as efficiently as possible.

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Rain Cement A Self-Sufficient Cement Manufacturer Positioned for sustainable profits despite changing global markets

26 MAY/JUNE 2012

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Rain Commodities (RCOL) is perhaps also well-known as an important producer of calcined petroleum coke. However, 19 percent of its overall revenues stem from its cement business in Southern India, known as Rain Cement (RCL). Marketed under the brand name Priya Cement in Andhra Pradesh, Karnataka and Tamil Nadu, RCL currently has a total installed capacity of 3.16 mtpa. RCL started operating as a cement producer in Southern India in 1986, changing its name from Priyadarshini Cement in 2004. In 2010, the firm announced its intention to achieve a 10 mtpa capacity in India through inorganic means but put no fixed end-date on the project. RCL bought Birla Cement and Industries from the Yasha Birla Group in 2011 as a wholly owned subsidiary, securing an additional 1.5 mtpa capacity and key limestone mining leases in Andhra Pradesh as part of the deal. RCL Today Currently, RCL's production is based out of two integrated plants in Andhra Pradesh. The larger plant site, near Boincheruvupalli village, has a 2.16 mtpa capacity after the Birla acquisition while the smaller plant, near Ramapuram Village and Kodad Taluk, has a one million ton capacity. Both plants enjoy the cost advantages of being connected to a larger multi-faceted operation, as RCOL is self-sufficient in all critical raw materials, including limestone, power and coal. This self-sufficiency as an organization helps RCOL position its cement business for profits despite volatility in the commodities markets and slowdowns in some of RCL's major contracts. Though analysts have viewed the cement operations as over capacity for the market, the firm's 2011 Annual Report stated that the company viewed the perceived oversupply of produced cement to be transitory based on existing and expected infrastructure projects in the works in Southern India. The firm acknowledged that some of the larger irrigation and housing projects in Andhra Pradesh were moving at a slower pace than RCL had initially been expecting due to political agitations, but stated that with no additional capacity expansions planned at the moment, the firm saw the supplydemand gap narrowing.

REVENUE FROM RCL INR mn 2,500

1,250

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The Directors' confidence in the financial stability of the firm and future profit potential have the company on a unique path to control costs and expand profit margins in its cement operations in the coming years. While other firms focus on supply costs, RCOL's self-sufficiency is allowing it to accelerate the pre-payment of debts to optimize its working capital for all segments. Additionally, the firm is nearing completion on a massive share buy-back program approved in October of 2011 and maintains a 55 percent dividend on shares. The Birla expansion purchase and debt pay-down strategy have positively shifted the financials and international analyst ratings of the cement business for RCOL and

RCL. Between 2010 and 2011, the net debt to operating EBITDA improved from 3.8x to 2.2x. In 2011, the cement portion of the business earned total revenues of 8.68 billion INR, up from 2010's 7.16 billion INR. This positive and profitable trend for the cement segment is expected to continue until at least 2013. Throughout 2011, cement realization was up one percent quarter over quarter, and the first quarter of 2012 delivered increased revenues in the cement division. Thus, while the global commodities markets and capacity expansions in India do create a volatile operating environment, RCL is in a position to enjoy solid profit margins and returns in the years ahead. BMWeek CemWeek CW Group BMWeek BMWeek

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cement market & competition

arket and competition

ement stock prices take a hit ahead of the long anticipated release of the CCI report regarding cartelization. Jaypee is under investigation for alleged environmental violations in Himachal Pradesh. Udayapur Cement shuts down reportedly for maintenance work, but claims of financial mismanagement plague the manufacturer.

Antitrust Accusations Hit Stocks The possibility of a CCI penalty due to accusations of cement company cartelization may have a negative impact on the industry. Analysts say that with the CCI moving closer to releasing a report on their findings, pressure is likely to mount on cement companies. The outcome is still unclear because the companies will most likely contest the ruling, but some kind of impact on cement stocks is expected. Even if the companies don’t actually pay a penalty, it will still adversely affect cement stocks because it will be the first time the CCI has taken such a step against the sector. Investigation Underway Officials are gearing up for a probe into alleged favors extended to the Jaypee Group in Himachal Pradesh, which allegedly led to environmental violations. Himachal Pradesh Chief Minister Prem Kumar Dhumal announced his government was investigating the role of government officials in this regard. "The previous government was responsible for granting the permission to Jaiprakash

28 MAY/JUNE 2012

Associates for setting up a cement plant and a thermal power plant by ignoring mandatory codal formalities from 2004 to 2007," he said. According to sources, the green bench of the Himachal Pradesh High Court on May 4 imposed Rs 100 crore in damages on JAL for having set up a cement plant and dismantling a thermal plant, both in the state's Solan district, violating environmental laws and making false pleas before the authorities and the court. Group Calls for Boycott Rayalaseema Rashtra Samiti called for a general strike against four cement factories

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in the area on May 23 if the price per bag was not brought down to Rs 150 from the current Rs 330. Samithi president Kuncham Venkata Subba Reddy sent out notices to the cement factories and also wrote a letter to the Prime Minister, apprising him of the problems faced by people in the Anantapur, Chittoor, Kadapa and Kurnool districts with regard to the high prices of cement. Temporary Shutdown Udayapur Cement is reportedly shutting down its cement plant for a month for “maintenance work.” Closure of the 800 tpd facility has been speculated to be

Stable Prices Expected HeidelbergCement says it expects prices to remain stable in the coming months, even as the monsoon season approaches which may dampen dispatches.

CEMENT: MARKET AND COMPETITION

focus

"We have cut prices in some areas and we have increased prices in some areas. So it varies from area to area. I do not think demand has been pretty sluggish. If you compare the demand in the first four months of this year to that of last year, there has been a growth and the growth has been significant," said Ashish Guha, CEO & MD of the company.

caused not by a technical failure but by mismanagement. The company countered that the shutdown was due to a malfunctioning gear box and that repairs have been proceeding as scheduled and the plant should resume operations soon. The company’s employees, however, doubted the company’s statement, saying the company’s finances are in shambles and it cannot pay its employees. They add that production has previously been suspended due to a myriad of reasons. The management admits that the factory has incurred losses of more than US$1.9 million due to the month-long halt in production, and it has not paid its employees for this month. It says it was unable to pay its staff as it was not producing cement, adding it will pay its employees once production resumes. Jaypee Raises Capacity The Jaypee Group is planning to increase its cement production capacity. The company is pushing for a production capacity of 50 mtpa in the next five years. Currently, the company produces about 33.5 mtpa. By the end of the year, the compa-

ny expects to reach a production capacity of 36 mtpa. Industry sources suggest that the company may require an investment of more than Rs 10,000 crore. The group plans to add capacity in states that it currently does not have any presence in, including Karnataka and the North East. It is also considering possibilities in the East. Currently, the Jaypee Group sells a vast number of its cement products into the Central region, where its sales have reached about 17 million tons last fiscal year. Mining Licenses Issued The government said it will allot mining licenses for limestone and iron ore. According to one report, mining licenses for these two minerals will be issued only to those companies who will use the cement grade limestone and steel grade iron ore in cement and steel plants. The report notes that in earlier schemes there was nothing binding companies who were issued mining leases to invest in manufacturing plants. This policy resulted in iron ore and limestone reserves going out of state and failing to bring in revenues.

He also expects growth to beat earlier estimates this year."We were talking about a seven percent growth for the whole year and it seems that the first four months indicate a higher growth for us. Maybe we are in different markets and in different regions the price corrections have been somewhat effective. In some markets it is larger than in other markets and in some markets we have seen price increases. So it is up on the current demand and situation in that particular area," he said. On the monsoons, Ashish Guha expects the season to have an impact on dispatches, albeit a minimal one. "Majority part of next three to six months is monsoons. So anyway we see every year the dispatches have impacted a bit. So I do not think it is going to be a significant impact on dispatches. It will be seasonal as it is observed every year and beyond September we start seeing growth. So if you say from May to October I am not seeing significant decreases in dispatch year on year, obviously from the months of March or May which are high season months for cement dispatches, it will be lower but that is yearly and I do not see any significant impact on dispatches on a proportionate basis," he said.

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cement volume and pricing

olume and pricing

ement sales slowed in April due to a lack of demand from infrastructure and a shortage of labor. Cement makers recovered from a sub-par FY11 by posting higher numbers in the succeeding quarter. Trade resumed between Pakistan and India in mid-April.

Demand Slow in April Cement sales slowed in April and a lack of demand from infrastructure and a labor shortage appear to be the culprits. Softening demand also led to falling prices in a few regions. Average cement prices across the country fell by Rs 10 per 50 kg bag to Rs 280 from Rs 290 in April. The price decline comes after a series of hikes that have plagued the market since January. Jaypee continued to outperform other large players with 23 percent YoY growth in dispatches. Mangalam Cement and Shree Cement also reported robust 30 percent and 20 percent YoY growth, respectively. JK Cement reported seven percent growth while HeidelbergCement`s dispatches were flat on a YoY basis. The aggregate dispatch of these players grew six percent YoY while declining 16 percent on a month over month basis.

percent in FY13, even amid price corrections during the period. Higher Production Volumes ACC and Ambuja reported higher production in April and in the first four months of the year. They reported production growth at 2.17 million tons and 1.91 million tons, respectively, in April. During the corresponding

In order to achieve the projected seven to eight percent growth for this fiscal period, demand will need to improve by three to four percent in May and June. India cement demand is expected to increase ten

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month last year, the output of ACC and Ambuja stood at 2.06 MT and 1.81 MT, respectively. Sales for ACC grew to 2.07 million tons compared to 2.05 million in the same period of the previous year, while those for Ambuja stood at 1.85 million tons against 1.82 million in April last year. For the January-April period 2012, ACC's production stood at 8.87 million tons compared to 8.28 million in the same period in 2011, the report said. Meanwhile, Jaiprakash Associates announced cement shipments in April rose 23 percent from a year ago to 1.77 million tons. Trade Resumes Trade resumed mid-April between Pakistan and India after the opening of the Attari-Wagah joint check post. Indian traders have already started giving orders to Pakistani cement companies. According to Ministry of Trade officials, cement export via the Wagah border were

CEMENT: volume and pricing

allowed and Pakistan would start exporting cement to India through trucks. After the trade resumption, Indian traders placed orders of cement to Pakistani industries, sources said, adding that cement production is in surplus in Pakistan. Due to the million-ton yearly cement export to India, closed plants will resume production. Industry Shows Growth India-based cement makers recovered from a sub-par FY11 by posting higher numbers in the succeeding quarter thanks to the robust demand revival in the second half of the year. According to data, demand grew 6.4 percent against less than five percent in FY11, better than cement makers’ earlier estimates of six percent. Cement makers sold 223.02 million tons of cement compared with 209.5 million tons, with production also rising to 223.6 million tons against 210.5 million tons. Region’s Production on the Rise Capacity additions in light of increasing demand will hike cement production capacity in Hichamal by 2015. Himachal’s

total cement and clinker production capacity is projected to reach 22.37 million tons by 2015 with the commissioning of a 3.75 mtpa capacity cement plant by JP Himachal Cements. The Industries Minister, Krishan Kapoor, reported that ACC had set up two cement plants at Barmana in the Bilaspur district with 7.70 million tons of capacity, and an agreement had been signed with

JP Cements to set up a second unit at Bagha with a capacity of 3.75 million tons in August 2010. The plant was slated for commissioning by August 2015. JP Cement’s first plant at Bahga, with a 2.75 mtpa capacity, has already been commissioned. Ambuja also set up two cement plants with 7.70 million tons of capacity, and another plant is producing 6.1 lakh tons of cement.

focus Cement Prices Softening Cement prices in India are on the way down after data suggests average prices have dipped two percent since April 15. CLSA reports that cement prices have started to weaken across India, with dealers expecting more falls ahead, according to its India Reality Research survey. Demand is being hit by "sluggish" construction activity. According to the report, ACC’s prices have risen six percent in 2012, Ambuja Cements are down four percent, while UltraTech Cement is up 21 percent on a year-to-date basis, compared to a 12.2 percent rise in Nifty. The outlook for the sector is mixed, with demand expected to rise seven to eight percent as construction picks up on the back of fall-

ing interest rates. Rising costs could, however, force companies to increase prices.

Shree's Q1 Sales Rise Shree Cement indicated its cement business did well in the first quarter of the year, helped by strong demand from its key Northern and Central India markets. This led to a 20 percent jump in sales compared with the same quarter last year. Firm cement prices also helped and boosted net sales 38.1 percent to Rs 1,477.8 crore, with 80 percent of this accruing from the cement business. Revenue surged 90 percent YoY, arising from power sale agreements with northern electricity distribution firms and the commissioning of a 150 megawatts (MW) unit.

On the flip side, average earnings in both business segments did not impress, as cement realization was a marginal five percent higher, and power realization dropped as merchant tariffs were lower than the yearago period. Thus, operating margins contracted by around 240 points to 25.3 percent, pulled down largely by the poorer profitability in the power division. According to analysts, this is partly because there was a larger proportion of power traded as opposed to generated during the quarter. Higher operating leverage of the cement segment and savings in power and fuel costs arrested a steeper drop in profitability during the quarter.

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cement m&a and finance

&a and finance

ltraTech is in negotiations to purchase a limestone mine in Mozambique and a cement plant in the northeast region of India. Released Q4 financials are mixed for several of the larger manufacturers. Chettinad Cement ponders delisting.

responding quarter of 2011-12. The companyâ&#x20AC;&#x2122;s net sales increased 9.75 percent to Rs 651.36 crore compared to Rs 593.50 crore last year. For the full year 2011-12, the company's net profit, on a consolidated basis, declined by over 25 percent to Rs 239.44 crore, though net sales were up 5.80 percent to Rs 2,246.87 crore. Birla says its performance was dragged down by higher expenses, which rose 15.68 percent to Rs 599.02 crore.

UltraTech in Negotiations Negotiations between Mumbai-based UltraTech and a limestone mine owner in the Magude region in southern Mozambique could result in the group building a one to two million ton cement plant in the African country where demand for the building material has been growing at the rate of eight to nine percent annually. UltraTech is reportedly also in talks to buy Adhunik MSP Cement's Meghalaya plant for over Rs 700 crore. According to reports, it plans to buy the 1.5 million ton

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unit and bolster its presence in the fastgrowing but largely untapped northeastern market. Due diligence for the unit located at Jaintia Hills has been completed and is now pending no-objection certificates, as mining leases and environmental clearances are prerequisites for any large manufacturing transactions. Earnings Posted Birla reported an 8.85 percent drop in its standalone net profit to Rs 57.46 crore for the fourth quarter. The company showed a net profit of Rs 63.04 crore during the cor-

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India Cements reports its revenues climbed into the double digits in the last three months of the year, on the back of higher demand growth in its main Southern India business. Revenues grew 19 percent at Rs 4,223 crore for the year ended March 31, 2012, up from Rs 3,540 crore in the preceding year. The significant pick-up in cement demand in the South during the final quarter and a big jump in net realization largely helped ICL post a healthy net profit of Rs 293 crore, up from Rs 68 crore in the preceding year. UltraTech Cement has reported its profits rose 19 percent in the fourth quarter, even as the company warned its margins were being squeezed by climbing production

nar, a subsidiary of Anjani Cement, which launched its diversification into tiles last year. Total investments for the project are estimated at Rs 600 million.

Teaming Up Kajaria Ceramics and Anjani Cement are teaming up for the production of tiles. The venture will be named Vennar Ceramics. It is expected to mark Kajarias’ entry into South India with a manufacturing plant at Kaikalur in Andra Pradesh.

Delisting Chettinad is is reportedly entertaining the idea of delisting its shares from the local bourse and is considering making an offer to shareholders to that effect. Promoters hold a large 88.4 percent stake in the company according to company financials. The remaining 11.6 percent equity is held by the public, including 3.3 percent by institutions and 4.7 percent by corporations.

Kajaria Ceramics is expected to have a 51 percent equity in the joint venture, with the rest of the shares allocated to Ven-

CEMENT: m&A and finance

period 2011. Net profits, however, dipped 5.2 percent, as the company has changed the method of providing for captive power plant depreciation.

focus Higher Margins in Q1 costs. UltraTech posted net profits of 8.67 billion rupees for the March quarter, beating estimates of higher volumes. Net sales rose 18.8 percent over the same period to 53.37 billion rupees. ACC and Ambuja Cements reported lower Q1 profits on the back of a one-time charge and higher inputs. Ambuja indicated a 23 percent fall in net profit to Rs 312 crore for the first quarter ended March 2012 compared with Rs 407 crore a year earlier. This was mainly due to a retrospective change in depreciation on captive power plants, which resulted in an additional charge of Rs 289 crore. ACC, for its part, reported net profit of Rs 152 crore for the same period compared with Rs 350 crore a year earlier, also impacted by a retrospective change in depreciation method. The net profit would have been Rs 380 crore under the earlier method. Sales at JK Lakshmi rose 28 percent in the first three months of the year on the back of higher demand and increased prices. According to the firm, net sales in the quarter ended March 2012 rose to Rs 526.33 crore. The company registered net sales of Rs 411.95 crore in the same

Indian cement firms have turned in higher operating profits in Q1 on the back of higher revenues driven by better sales for the period, reports the Digital FC. The country's largest cement producer, UltraTech Cement, reported 24.5 percent EBITDA margin in the quarter compared with 23.9 percent a year ago, and Ambuja Cement reported a 29 percent operating margin compared to 28 percent a year ago. JK Lakshmi Cement has reported a 21 percent operating margin compared to 19 percent a year ago. According to the report, UltraTech’s profits was 8.7 percent higher than last year at Rs 4,060 per ton. Ambuja Cement’s profits were up 8.8 percent from a year ago to Rs 4,260 per ton. Meanwhile, JK Lakshmi Cement’s profits for January-March increased 12.7 percent from a year ago to Rs 3,717 per ton. In spite of these factors, higher energy prices and rail freight are expected to keep the profit margins under pressure, Ambuja said in a statement. “Last year, the cement sector witnessed a demand growth of around five percent while

this year the sector witnessed demand growth of around 6.9 percent which has helped the cement companies to increase prices and pass on their increase in input costs to consumers. In 2012-13 we expect the sector to grow at around eight to nine percent,” Shailendra Chouksey, whole-time director of JK Lakshmi Cement, said.

Cautious Stance Credit Suisse is taking a cautious stance on India-based cement makers, taking into account risk factors in the local market. It recently restarted coverage of the domestic cement sector with an "underperform" rating on ACC and UltraTech Cement, and a "neutral rating" on Ambuja Cement. The company sees near-term "headwinds" for the sector due to a slowdown in rural and urban housing, despite the "attractive longterm rural story." Credit Suisse says margins will also "deteriorate" due to an expected 13 percent rise in power and freight costs on the back of higher domestic coal and diesel prices. On the flip side, Credit Suisse makes an exception for India Cements, which secured a rating of "outperform" given their more attractive valuations compared to other stocks in the sector.

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cement projects and expansions 5

1 rojects and expansions

CC discusses its four mtpa expansion plans. Work on Wonder Cement’s new production line gets underway. Jharkhand celebrates the addition of a new 2.1 mtpa capacity cement facility in the state.

ACC Unveils Expansion Plans ACC plans to build three grinding plants and add a clinker unit in India by spending Rs 3,300 crore through 2015. ACC Managing Director and Chief Executive Kuldeep Kaura indicates the plans will increase production by four mtpa by 2015 from the current capacity of 30 mtpa. "The new grinding facilities in Jharkhand and Bengal will use the clinker produced at Jamul. The expansion plan will be implemented in a phased manner and completed by 2015," he said. According to the company, the existing clinker and grinding facilities at Jamul will be phased out, and the new clinker unit will have a capacity of 2.79 mtpa. One grinding unit each will come up at Sindri in Jharkhand and Kharagpur in West Bengal. The third grinding plant and the clinker facility will be set up at Jamul in Chhattisgarh. New Production Line Commissioning work has commenced at the new 6,500 tpd cement production line built for Wonder Cement in Nimbahera in the state of Rajasthan. ThyssenKrupp

34 MAY/JUNE 2012

Cement Projects/Expansion Table

COMPANY/LOCATION

COMMENTS

ACC/Jharkhand, Bengal & Chhattisgarh

ACC plans to build three grinding plants and add a clinker unit: ■■ One grinding unit will come up at Sindri in Jharkhand and a second in Kharagpur in West Bengal. ■■ The third grinding plant and the clinker plant will be set up at Jamul in Chhattisgarh. ■■ The new grinding facilities in Jharkhand and Bengal will use the clinker produced at Jamul.

State of Tamil Nadu/ Ariyalur

The state of Tamil Nadu has given approval for an Rs 515 crore plan to upgrade two of its units: ■■ Alangulam cement plant with an outlay of Rs 165 crore. ■■ Ariyalur cement plant for around Rs 350 crore.

Polysius provided the main components, including a tangential blending silo with a capacity of 20,000 tons of raw meal and the kiln system consisting of a 6-stage, 2-string Dopol’90 preheater with PrepolMsccalcining system, the rotary kiln and a Polytrack clinker cooler. Also supplied were two cement-grinding systems. Each of these 200 tph combigrinding systems consists of a Polycom high-pressure grinding roll, a Sepol-PC high-efficiency separator and a singlecompartment mill.

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New Facility Inaugurated The Chief Minister of Jharkhand India, Arjun Munda, and the Chairman of the Steel Authority of India Limited (SAIL), C.S.Verma, dedicated a 2.1 mtpa capacity cement facility. The new facility is the fourth major cement plant within the state and involves a 74:24 equity participation by the two partners, Jaypee Group and SAIL. The new plant will be called the Bokaro Jaypee Cement Plant (BOJCL), and the chairman will be Sanjay Gaur.

CEMENT: projects and expansions

eople

esignations of directors announced at HeidelbergCement and UltraTech. Lafarge India welcomes new CEO. Director Resignations HeidelbergCement India announced that Mr. Amitabha Ghosh ceased to be Director of the Company effective upon the conclusion of the 53rd Annual General Meeting (AGM) held on April 25, 2012. He was retired by rotation at the AGM since he had not sought re-election by the shareholders at the meeting due to personal reasons.

focus Cement Terminal Project to ABG A cement terminal project in Azhikkal port has been awarded to India's ABG Group, according to media sources. Reports indicate the state government had floated two separate tenders for two terminals, one for cement and the other multi-purpose, and ABG was the lone bidder for the terminal. The committee, comprising Kerala Port Department director Jacob Thomas, deputy director Hari A Warrier and senior port conservator at the Azhikkal port M Sudheer Kumar, evaluated the tender and decided to give the work to ABG. As part of this project, the business group will develop the terminal by creating a sixmeter draft so that a 10,000 ton ship can be brought to the terminal.

The facility is comprised of two mills. Each will have a 1.7-ton capacity. With both mills functioning, the facility will have the capacity to produce around 340 tons of cement per hour. The plant itself was built at an approximate cost of Rs 440 crore. Approval Secured The state of Tamil Nadu has given approval for an Rs 515 crore plan to upgrade two of its units. The state government has indicated that Rs 165 crore had been sanctioned to upgrade the Alangulam cement plant with an outlay of Rs 165 crore. Orders have also been issued to appoint a project management consultant to increase the production of the Ariyalur cement plant to 1.5 mtpa from the current 500,000 tons. The investment for the proposed expansion would be around Rs 350 crore, according to the state industries department. The government has also permitted TNPL to produce 600 tons of cement per day at an investment of Rs 67.46 crore from the waste of lime clay and fly ash.

UltraTech Cement, one of Indiaâ&#x20AC;&#x2122;s largest cement companies, also informed the Exchange that Mr. N. J. Jhaveri had resigned from the Board of the Company effective April 04, 2012. New CEO at Lafarge India Martin Kriegner, appointed to the position, said: "I am happy to return to India as Country CEO, at a time when the construction sector is evolving quickly in the country. By combining all of our activities together, we will be able to support this evolution by offering integrated and innovative solutions at an earlier stage of construction in close proximity with our customers, allowing the full benefits of our innovative products and services to be realized." Kriegner joined Lafarge in 1990 and became the CEO of Lafarge Perlmooser, Austria in 1998 before he moved to India as Head of the Cement activity in 2002. Prior to this assignment he served as Regional President, based in Kuala Lumpur. Lafarge has four cement plants in India: two plants in the state of Chattisgarh and a grinding plant each in Jharkhand and West Bengal.

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ement equipment

ives acquires Indian company specializing in the design and supply of combustion equipment. Ibau builds cement terminal in Sweden. Fives acquires CBL Combustion In January, Fives acquired CBL Combustion Systems, an Indian company specializing in the design and supply of combustion equipment used mainly in the energy (burners for industrial boilers and thermal power plants) and minerals (cement) sectors. CBL, headquartered in Mumbai, also has a burner production and assembly workshop located in Vadodara in the state of Gujarat. The company, which has approximately 100 employees, has a turnover of about US$5 million (INR 300 million of sales). CBL markets its offer based both on its own technologies and those of Fives Pillard. The company will change its name pending regulatory approvals and will adopt the Group’s visual identity. Through this acquisition, Fives Pillard has gained an operational structure in the combustion field in India, allowing it to accelerate its development in this high growth market for which a local presence is a key success factor. This acquisition marks a new stage in the Fives Group’s development in India and the growth of its local operational footprint. 36 MAY/JUNE 2012

IBAU builds Cement Terminal at the port of Malmö, Sweden Haver & Boecker subsidiary Ibau Hamburg led the construction of a cement terminal for Cementa of the HeidelbergCement Group at the port of Malmö, Sweden. Haver & Boecker supplied the complete electrical system and automation for the project. During the planning phase, Ibau worked in close cooperation with HeidelbergeCement's Technology Center in Brussels, and it was decided that the control room in the multichamber silo would be moved to Level 1. This offered the advantage of considerably reduced cable paths through silo walls. Because space for the switching and control cabinets, energy distribution and transformers was limited, Ibau opted for maintenance-free, gasisolated medium switchgear. The electrical installation involved a number of demanding challenges for the personnel. Installation of the cable works and laying the cable in the bucket conveyor tower—from Level 0 to 100 meters—required special cranes and had to be carried out by workers who weren’t afraid of heights. One challenge for the automation systems supplied by Haver & Boecker was adapting the PCS7 process control system to the silo processes so that clear and well-arranged process groups resulted and thus allowed easy operation and rapid fault detection. The tanker trucks and wagons are automatically load-

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ed according to the shipping orders thanks to the data exchange between the process control unit and the shipping system provided by Cementa. By cooperating closely with HeidelbergCement’s Technology Center in Brussels, the processes were optimized so that the terminal could be operated without operating personnel. After the facility start-up, the terminal was successfully handed over to Cementa in March 2012 after almost two years of planning and construction work. When approaching the Copenhagen, Denmark airport at night, it is possible to see the distinct skyline of the multi-chamber silo, which is fed by a mechanical-pneumatic ship unloading system, is 100 meters tall, has a diameter of 26 meters and contains 30,000 tons of cement. Automatic loading of tanker trucks and wagons is carried out 365 days a year.

update Events on the Horizon

Loesche expands into combustion systems

CemWeek catches up with Andre Cholewinski of GMI Global—the organizer of the Cement Business & Industry Conference—to discuss its flagship event, the Cement Business & Industry India 2012 Conference, which will be held in Mumbai, India on October 10-11, 2012 at the Leela Mumbai Hotel. CemWeek: What is the foundation of the Cement Business & Industry India Conference 2012? Cholewinski: The primary intent of CBI is to provide a forum that is not only informative and relevant from an industry perspective, but one that also provides great networking opportunities. Our events and programs are developed with the assistance of leading industry thought leaders. I can even go as far as to say that we are selective in the development and delivery of our programs to ensure we deliver quality programs that are commensurate with our reputation for top-notch programming. CemWeek: That is a lofty promise. How do you intend to deliver on it? Cholewinski: Our philosophy is to take a dual track approach whereby we are able to provide a “content-first” forum that provides our delegates with a careful and relevant content agenda and not a mere succession of PowerPoint slide presentations. This content agenda is shaped around common as well as dual track sessions aligned along both business and technology perspectives to attract “both” sides of the house to further hone in on relevant topics. By employing this approach, we not only bring together both important perspectives but also still maintain the individuality of each so that they can select topics relevant to them and prevent the mishmash of agenda topics that pollute some events. CemWeek: What has been the response been to CBI India 2012? Cholewinski: I am very pleased and excited to share with you that we have gotten an

incredible response to CBI India 2012 from a wide variety of organizations in India, as well as many international organizations. This is truly a “local” event, appealing to both global as well as local thought-leaders and participants. Just the other day, a manager from a leading cement company in India said, “Thank you for finally putting some relevant content on the table for us.” Feedback like this has been coming in, energizing and motivating our work on this event. CemWeek: What do you attribute the positive response to? Cholewinski: Although the conference has a focused regional context, it is also providing meaningful content that has global appeal. In addition to our dual approach that I mentioned previously, the theme of the conference is “The shift from West to East in global cement.” This is reflected in the content of the program as well as the individual presentations which will be delivered at the conference. CemWeek: What is the outlook for the future of GMI and what else are you planning? Cholewinski: In the upcoming months, we are fully focused on CBI India 2012 and are already preparing for the follow up, CBI India 2013. In addition, we are paving the way for CBI Africa 2013 and CBI Brazil 2013. You will also be seeing several cement sector summits that are highly relevant to the cement industry later this year and into next. To learn more about CBI India 2012 or other GMI events, contact Andre Cholewinski at ac@gmiforum.com or via telephone at +1-203-516-7424. www.gmiforum.com

Loesche ThermoProzess announced that they have taken over the specialized “Combustion Technology” department at UCON’s Containersysteme in Gelsenkirchen, Germany. For more than 60 years, this division of UCON’s Containersysteme has been well known as “Küppersbusch Fachbereich Wärmetechnik.” A large variety of industrial combustion systems have been developed, designed and delivered by them. Loesche ThermoProzess is a subsidiary of Loesche Düsseldorf and together with the “Thermal Applications” department represents, within the Loesche Group, thermo process technology for this field of international industry. With thermo process technological solutions, Loesche covers another field of activities with related products, e.g. industrial burners and hot gas generators. The integration of the specialized “Combustion Technology” department at UCON’s Containersysteme KG, Gelsenkirchen, with their range of products is thus another component for the expansion of the Loesche Group’s portfolio. In the future, products by the new Loesche ThermoProzess will be available under the brand name Loesche & Küppersbusch. The Managing Director of Loesche ThermoProzess is Matthias Authenrieth, and Günther Balgar has been designated as operational manager for the facility in Gelsenkirchen. BMWeek

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CONSTRUCTION materials

nfrastructure & projects

VRCL Assets wins two national highways projects. The Hindujua Group plans to develop several projects across India. Opening of the Yamuna Expressway is delayed once again.

NEW PROJECTS IVRCL Secures Two Highway Projects Hyderabad-based IVRCL Assets and Holding has won two national highways projects from the National Highways Authority of India (NHAI) worth Rs 3,203 crore. The cost of building the national highways is estimated to be Rs 1,617 crore. The project involves upgrading the fourlane national highway (NH-5) between the Gundugolonu and Rajamundry section in Andhra Pradesh into six lanes on a toll basis. The project also includes conversion of the Patiala to Bhatinda section of NH-64 to four lanes in Punjab. The total cost of the project is Rs 1,586 crore as per PWD, the Punjab government. Group Land Development The Hinduja Group is set to develop 2,500 acres of group land through its realty arm, Hinduja Realty Ventures. The Hinduja Group holds around 2,500 acres of land parcels in India privately and through group companies. The Group’s real estate development arm will develop projects over 300 acres across the country that are owned by companies such as Ashok Leyland, Gulf Oil Corp, and Hinduja TMT. The company is expected to spend around

38 MAY/JUNE 2012

tion, the corridor will ease congestion and will bring relief to around 1.5 million residents and commuters in Gurgaon.

Rs 7,300 crore to develop nearly 40 million square feet of office space in the coming five to seven years at Hyderabad and Bangalore. Of this developable space, around 27 million square feet will be saleable and leasable. 16-Lane Corridor at Gurgaon India’s leading real estate developer, DLF, along with Haryana Urban Development Authority (HUDA) plans to build a 16-lane dedicated corridor in Gurgaon. The 8.3 km corridor will connect DLF’s Gateway Tower in Cyber City to the Golf Course Road in Delhi. The estimated cost of the project is around Rs 400-600 crore. After comple-

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HCC Concession Secures NHAI Contract HCC Concessions, a subsidiary of Hindustan Construction Company, has bagged a contract worth Rs 800 crore from the National Highways Authority of India (NHAI) for six-laning of the VadodaraSurat section of NH-8. The project involves construction of a new four-lane bridge across the Narmada river in Gujarat. The concession period for the project is 12 years, which includes a construction period of 30 months. Small Firms to Benefit NHAI plans to build one-third or 2,800 km of this fiscal year’s target of 8,800 km in the form of two-land roads on cash contracts. The road authority plans to award twolane projects which may entail work orders worth up to Rs 15,000 crore to smaller firms on EPC or engineering procurement and construction or cash contract basis rather than on BOT (build-operate-transfer) or BOOT (build, own, operate and transfer) basis.

Construction materials: infrastructure & projects

HCC Bags Rail Tunnel The Hindustan Construction Company (HCC) bagged a rail tunnel order worth 162 crore to develop a railway tunnel at Imphal, Manipur. The project awarded by the North Frontier Railway involves construction of a 3.3 km rail tunnel and is scheduled for completion in 28 months. Kashmir Gets New Tunnel Jammu & Kashmir is set to get the longest road tunnel. The road tunnel project, known as the Patnitop Tunnel, will connect the districts of Chenani and Nashri. The project will see the construction of two tunnels, two each on the Quazigund-Banihal stretch (8.45 km) and Chenani-Nashri stretch (9 km). The cost of the project is expected to reach Rs 4,500 crore. The tunnel is a part of the planned fourlane widening of the National Highway 1A (NH1A) between Srinagar and Jammu and is an alternative to the existing NH1A section, which faces safety concerns as it passes through the steep mountain terrains. The tunnel is being constructed using the New Austrian Tunneling Method (NATM) technique and is expected to be completed by mid-2015. Work on the tunnel has already begun to impact employment opportunities for locals and is also expected to benefit the food-processing industry in the state. Uttar Pradesh Township Expansions Ansal Properties and Infrastructure has sought permission from the government of Uttar Pradesh to expand its 3,500-acre township Sushant Golf City at Lucknow to 6,000 acres. The company is developing about 70,000 units and 50,000 units at present at Lucknow and Greater Noida, respectively. The Ansal API has already spent Rs 33,000 crore over a period of two decades to expand the two townships. The cost of the project, which involves development of the township for middle and highmiddle class people, is expected to increase proportionately.

update on PROJECTS Yamuna Expressway Misses Deadline The opening of Yamuna Expressway will take at least six more weeks, missing its deadline yet again by a month. Work is still pending on the expressway, and technical glitches need to be sorted out. The Yamuna Expressway opening has been stalled for varied reasons over the past few months, and the latest dispute is between farmers and the E-way Authority Chairman overseeing construction of the Expressway and the reshuffling of officials in the district. Once the Yamuna Expressway is operational, it will decongest traffic in the Yamuna region. Work on Bogibeel Bridge Fast Tracked Construction work on Bogibeel Bridge— the country’s longest rail-come-road bridge—is picking up pace. The 4.9 km project comprises a double line broad gauge rack and a three-lane road connecting two existing railway networks from Chaulkhowa and Moranhat stations and between Sisibargao and Siripani station of the Rangiya-Mukongselek section. The slow execution of the project, which was sanctioned in 1997-98, has resulted in cost overruns from the original Rs 1,767 crore to Rs 3,230 crore. However, work on the bridge is now on the fast track and is expected to complete by 2015.

Excavation Work Completed Leighton Welspun Contractors has successfully completed excavation of 2 km at its iconic Chenani-Nashri tunnel project. The excavation of the 2 km combined length of the two escape tunnels, north and south, has kept the company on target to complete the tunnel on schedule. Once completed, the Chenani-Nashri tunnel will reduce the distance from Chenani to Nashri to 10 km from the present 30 km and will lessen the travelling time by up to an hour. IVRCL to Start Work in September The Hyderabad-based IVRCL assured the Punjab government that it would start work on four-laning the Patiala-Bathinda stretch by September 15, 2012. IVRCL assured the Punjab government that it would complete the project as per the government’s deadline. The project, when completed, will change the face of Punjab. The total cost of the project is Rs 1,586 crore as per PWD. Construction on Roadway Begins The NHAI has started construction work on the service road between Rajokari and RTR-Palam crossing. Once completed, the service road will reduce congestion on the Delhi-Gurgaon expressway. The NHAI has awarded construction to a private contractor under a cash contract project. The service road is expected to be complete in four to five months.

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construction materials

quipment updates

ew products launched by several manufacturers, including Volvo, Caterpillar and XCMG. Others, such as Bobcat and Kobelco, expand existing lines.

tional drill. This new drill is powered by a 275-hp CAT diesel engine. The drill has a rotational torque or max rotational speeds up to 200 rpm. Its user interface offers enhanced ability to monitor drill performance during operation.

Hyundaiâ&#x20AC;&#x2122;s Compact Radius Excavators Hyundai Construction has launched a series of Compact Radius Excavators. For projects requiring small excavators, Hyundai has launched the R27Z-9 and R35Z-9 zero tail swing models. The new excavators are perfect for tight, confined job sites. The R35Z-9 zero tail swing weighs 8,050 lbs (3650 Kg) and is powered by a 27.3 hp (20.4 k) Yanmar 3TNV88, water-cooled, four-cycle engine. It has a dig depth of 7.2 feet and bucket digging force of 7,050 lb.

cient Yanmar 4TNV98 diesel engines. The maneuverability make of these models is suitable for light construction, landscaping, demolition, utility and other applications where power is needed in confined spaces.

For medium projects, Hyundai has launched R60CR-9 and R80CR-9 excavators. Both models are powered by fuel-effi-

Horizontal Directional Drill Vermeer Corporation has launched the D100x140 Navigator horizontal direc-

40 MAY/JUNE 2012

For large projects, Hyundai has launched the R145CR-9 and the R235CR-9 excavators. These have a digging capacity of 16.1 feet and are powered by Mitsubishiâ&#x20AC;&#x2122;s D04FD-TAA water-cooled, four-cycle diesel engine.

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New Cold Planer Milling Machines Bomag has launched two new models of milling machines, the BM500/15 and the BM600/15. These new milling machines feature an innovative rotor geometry which reduces the vibration, simplifies drum replacement and increases service life. A 125-hp Deutz liquid-cooled diesel engine powers the new models. Both models have three variable cutting speeds that optimize milling performance. The BM500/15 offers a standard cutting width of 19.7 inches whereas the latter offers a 23.6-inch cutting width. Both models have a cutting depth of 8.3 inches and a milling radius of less than ten inches. Bobcat Limited Edition Bobcat launched a new, limited edition version Bobcat 1.6 ton compact excavator E16 with unique styling to celebrate its 25 years in the compact excavator industry. The limited version model is an attractive

Volvo’s New Excavators Volvo Construction Equipment has launched two new short swing radius excavators, the ECR145D and ECR235D. The excavators are designed for operation in confined areas. Both the models launched by Volvo meet the Tier 4-Interim emissions legislations. The models also feature improved hydraulics and pump flow that provides faster cycle times and better digging performance. Both models are available with mono or two-piece boom, an optional blade, several arm configurations and three-piece, high tensile steel X-shaped frame undercarriages.

highly versatile excavator newly introduced by Kobelco delivers up to a ten percent improvement in both productivity and fuel efficiency. The new product also provides more power and faster engine response. The SK170 Mark 9 is equipped with the industry’s first selective catalytic reduction (SCR) emission solution for excavators and features a fully automatic engine and hydraulic warm-up system. Kobelco America’s Mark 9 excavators are the most fuel-efficient machines the company has ever built.

XcmG’s New Products Launched XCMG launched six new products, including cranes and loaders, at Qatar Project 2012, an exhibition held in Doha, the capital of Qatar. XCMG, which has fully participated in all of Qatar’s key construction projects including the new Doha port project, displayed its new products and consolidated its position during the exhibition, which also saw participation from construction companies such as the Al Mana Group and Al Hamad Automobile.

construction materials: EQUIPMENT UPDATES

complement to new enhanced versions of both the E16 and the 1.4-ton E14 launched by Bobcat. The new excavator features new exterior styling, new ergonomic travel levers, and pedals.

New Electric Forklift Caterpillar launched a new electric forklift called the EP13-20. The new forklift delivers power and productivity. Available in lift capacities of 1.3, 1.5 (three-wheel versions), 1.6, 1.8 and 2.0 tons (three and four-wheel), the EP13-20 extends service intervals to 1000 hours and reduces energy consumption by nine percent. The newly launched trucks resist harsh working environments and ensure maximum up-time, lifetime, and maximum productivity. New crane Launched in UAE Swiss-based Liebherr introduced the mobile construction crane MK 00/110. The MK 100/100 mobile construction crane can be used to perform a number of jobs where a mobile crane would not be as efficient. The crane uses a trolley similar to a tower crane and can be used to complete smaller jobs in a much quicker manner than with a mobile crane with a telescopic arm. The new crane weighs 1800 kg at full range and has a lifting capacity of eight tons to a range of 14 meters. Kobelco’s Addition Excavator Series Kobelco America has complemented its Mark 9 excavator series with the SK170 full-size, high performance excavator. The

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regional news rose by 7.77 percent to nearly 15.93 mil-

A large number of Pakistani cement makers suffered losses in lion tons, and south-based mills registered financial year 2010-2011, and industry debt is on the rise. Bang- higher domestic consumption by 11.81 ladesh’s Seven Circle plans to double capacity, and Holcim’s Sri percent to 3.70 million tons. Lanka unit turns to waste materials to reduce production costs. Pakistan All Pakistan Cement Manufacturers Association (APCMA) Chairman Aizaz Shaikh reported that as many as 11 cement units suffered losses before taxation, aggregating to Rs 5.68 billion during the financial year 2010-2011, while seven cement units, of which two are located near Karachi in close proximity to the seaport, earned profits of Rs 5.98 billion.

than the corresponding period of the last fiscal. Domestic sales during this period rose by 8.51 percent, but exports registered a 8.91 percent decline. According to the report, the performance of north- and south-based mills depicted different trends in domestic sales and exports. Local sales of north-based mills

Industry debts to financial institutions have also risen to a massive Rs125.3 billion, and cement units located in the North are particularly challenged owing to low demand and are unable to service their debts. Meanwhile, cement sales in Pakistan rose in April, but exports to neighboring countries continued to sink. According to a reported from the APCMA, total cement dispatches until April 2012 totaled 26.64 million tons, which is 3.31 percent higher

The Afghanistan market remained relatively stable as exports declined nominally by 0.15 percent to 3.78 million tons, and India rose by 15.19 percent to slightly over 500,000 tons by sea and the Wahga border. Exports to other destinations by sea decreased by 16.96 percent to 2.7 million tons. Bangladesh Seven Circle plans to double its production output in two years to 3.3 million tons. According to Asadul Haque Sufyani, general manager of Marketing for Seven Circle (BD), “We have now the capacity of 1.7 million tons per year and the expansion drive of our company was taken in view of the rising demand of cement." "Consumption of cement, one of the key backward linkages of the construction and real estate sectors, witnessed significant growth in Bangladesh in the recent years and our expansion drive reflects that vision," he added. Presently, there are 30 operational cement companies in Bangladesh able to produce around 21 million tons of cement a year against a demand for 8.5 million tons. Some local companies are enhancing their production capacity, as domestic demand has consistently been on the rise for the past few years—except for 2007—along with increasing government initiatives. Sri Lanka Holcim's Sri Lanka based unit started using agricultural waste to reduce production costs by at least 30 percent. Chairman Manilal Fernando indicated the company was using rice husks, straw, agriwaste and other garbage material to generate power. Furthermore, the company is doing on-going research to save more energy by way of using building material waste to generate energy. BMWeek CemWeek BMWeek BMWeek

42 MAY/JUNE 2012

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update Cachapuz Bilanciai updates dispatching solution:

new SLV Cement Cross-Platform ready the inbound and outbound processes in their plants. This new release of SLV Cement is now web-based and cross-platform, introducing new ways for the users to interact with the system from everywhere and using different types of devices. From a standard desktop PC, a kiosk, a Smartphone or Tablet, the users can always be connected with the system and are able to interact with it at any time. Functionalities like the reporting and KPI analysis, layout and flow configurations, monitoring of the system, front-end of the kiosk screens, among others, are now available from multiple devices and platforms, improving the user experience and availability and thus reducing the time to access those features. Complementing the mobility of the users, the notification and alert components were also improved so that the users can be informed by e-mail or SMS on pre-defined events occurring during the loading and unloading processes (such as abnormal situations, unauthorized operations, maintenance needs, lack of connectivity in a module of the system, etc.). achapuz Bilanciai Group has announced a new version of its dispatching solution for cement plantsâ&#x20AC;&#x201D;SLV Cement. The new SLV Cement solution was built taking into account a more connected world where the mobile devices and the cross-platform solutions are needed. In

the cement industry this is also the case. The users and agents from all departments (such as maintenance, logistics, commercial, dispatching and management) interacting with IT systems are demanding the ability to use their applications and access to the information across several devices and platformsin order to take control of

All the new system modules have been upgraded with these new functionalities, such as the check-in, parking management and truck calling, access control and identification, automatic and self-service weighing, dispatch and reception, bulk loading, raw materials unloading and bags loading and counting. BMWeek CemWeek CW Group

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analyst recommendations to see a demand upswing works in Birla Corporation’s favor. Though the company is fighting a legal battle over mining rights, affecting its profit margins, the end seems to be in sight. Marwadi Shares & Finance (MSFL) has given a ‘Buy’ rating to the company, and a price target has been set as Rs 315 against a CMP of Rs 255. With three percent YoY growth in cement volumes and a ten percent YoY increase in net realizations, Networth Capital has given a ‘Buy’ rating to Birla Coporation. The price target has been set as Rs 292 against Rs 248.

ACC ACC received a ‘Sell’ rating from Finquest due to low realizations that fell below expectations. Stagnant cement prices in the face of increasing costs also affected EBITDA margins. Going forward, demand is yet to pick up while prices may continue to remain stagnant despite escalating costs. Profits were 55.7 percent lower for Q1CY12, largely due to a one time depreciation cost as the company migrated from straight line depreciation to written down value depreciation on its captive power plants. Price target is set as Rs 1,150 against Rs 1,226. Through Q1CY12, performance is in line with estimates. Additional cost pressures are on the horizon for ACC as the increase in railway freight and excise duty comes into effect. Capital expenditure to the tune of Rs 33 billion is also in the cards with the self-financed capacity expansion project that is slated for completion in 2015. Hikes in coal royalties and power charges are also in the pipeline. As such, Emkay has maintained a ‘Hold’ rating with a price target set at Rs 1,247 against Rs 551.1.

balance sheet and future prospects that depends on the company’s brand equity and market and segment mix. Furthermore, capital and fuel efficiency is also expected to add to the profit figures in the coming years. The price target has been set at Rs 200 against the current market price of Rs 143. Ambuja Cement’s strong presence in the western and northern regions, where there is a demand upswing, coupled with its smooth logistic ties and network connections, will hold the company in good stead and is expected to boost EBITDA figures, especially in the wake of rising infrastructure investment projects. Networth Capital has given a ‘Buy’ rating with a price target of Rs 180 against a CMP of Rs 146. Lower expenses and increasing volumes improve operational efficiency for the company for 1QCY12, but looking ahead escalating freight and tax hikes are expected to affect bottom line figures. Increased coal prices and upwards revision of wages at CIL will also add to the cost pressure. As such, Emkay has advised a ‘Reduce’ for Ambuja Cement with a price target of Rs 165 for a CMP of Rs 165.

ambuja cement Motilal Oswal Securities has given the green signal to Ambuja Cement with a ‘Buy’ rating based on the company’s strong

44 MAY/JUNE 2012

birla corporation A strong presence in the northern, central and western regions that is expected

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HeidelbergCement india Higher than expected profit figures due to a 17 percent fall in expenditures has earned HeidelbergCement a ‘Buy’ rating from SPA Securities with a price target of Rs 50 against a CMP of Rs 269. A demand surge in the central and western regions resulted in a volume hike of seven percent QoQ, while revenue growth was pegged at 11 percent QoQ. Demand is expected to grow in Central and Western India where the company enjoys a strong presence. India Cements Lower EBITDA and lower realizations compounded by higher costs and only two percent YoY growth in volumes has lead Emkay to give India Cements a rating of ‘Hold’ with a price target at Rs 101 against a CMP of Rs 87. Strong operational efficiency is in the cards for India Cements with the commissioning of a 50 MW captive power plant in Tamil Nadu and another expected in Andhra Pradesh. The company is also considering captive coal mining in Indonesia. With the thrust on operational efficiency and with rising demand and pricing discipline continuing in South India, India Cements is expected to do well. Karvy has endorsed the company with a ‘Buy’ rating, keeping the price target as Rs 119 against Rs 87.

Despite lower than expected net sales and cement volumes, EBITDA per ton rose 18 percent YoY due to an increase in realization. ICICIDirect has recommended a ‘Hold’ for India Cements with a target price at Rs 93 against a CMP of Rs 87. jk lakshmi Strong realizations and 26.3 percent YoY growth in top line figures overcame a 21 percent YoY hike in freight costs and 23 percent increase in personnel expenditures to help JK Lakshmi get a ‘Buy’ rating from Angel Broking. The price target has been set as Rs 79. mangalam cement Mangalam Cement gets a ‘Buy’ from SPA Securities with a price target set at Rs 193 against a CMP of Rs 132. High operating costs played havoc with bottom line figures as EBITDA dropped 15.3 percent over rising pet coke and freight costs. However, lower valuations, capacity expansion and reducing power dependency are set to improve the top line and bottom line figures over the next two years.

ultratech cement

shree cement Improved sales as well as higher cement prices helped Shree Cement improve revenues by 38 percent YoY during the fourth quarter. Bottom line figures also got a boost from other income sources that were greatly augmented by an additional Rs 370 million from earlier reserves that are no longer needed. Lower pet coke prices also had a positive impact on EBITDA figures. As such, Kotak Securities has revised its rating to “Accumulate” for Shree Cement. The price target has been set as Rs 2,886 against a CMP of Rs 2,657. Emkay has advised an “Accumulate” for Shree Cement with a price target of Rs 3,000 against a CMP of Rs 2,659 because the company posted higher than expected EBITDA that increased 48 percent YoY to Rs 4.38 billion, backed by reduced power and fuel expenses, higher other income and a decline in pet coke prices. Looking ahead, FY 2013 is also expected to reap the benefits of power cost savings, improved product mix and volume growth.

Higher cement realization and lower energy costs led to a better than expected 15 percent growth in EBITDA that was further aided by higher income from other sources. Emkay has retained its “Reduce” rating for UltraTech with a price target of Rs 1,290 against a CMP of Rs 1,437. Higher volumes, positive pricing trends and improved realization led to an 18.8 percent YoY increase in net sales in line with estimates. A demand surge is also expected with increased infrastructure projects, including the MIC (Delhi Mumbai industrial corridor), though cement prices are likely to remain firm. As such, GEPL Capital has advised “Accumulate” for UltraTech Cement with the price target set at Rs 1,595 against Rs 1,414.35 CMP. Karvy has recommended a “Hold” for UltraTech with a price target at Rs 1,566 against a CMP of Rs 1,466 on the basis of a strong performance that saw a rise in realization and profits while operating costs remained firm. Demand is also expected to pick up. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek

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ratings changes Date

Broker

Company

Rating

Target Price

Current Market Price

25-Apr-12

Finquest

ACC

Sell

1,150.00

1,226.00

23-Apr-12

Emkay

ACC

Hold

1,247.00

551.10

17-May-12

Motiwal Oswal Securities

Ambuja Cement

Buy

200.00

143.00

10-May-12

Networth Capital

Ambuja Cement

Buy

180.00

146.00

23-Apr-12

Emkay

Ambuja Cement

Reduce

165.00

8-May-12

MSFL

Birla Corporation

Buy

315.00

255.00

4-May-12

Networth Capital

Birla Corporation

Buy

292.00

248.00

17-May-12

SPA Securities

Heidelberg Cement

Buy

50.00

269.00

2-May-12

Emkay

India Cement

Hold

101.00

87.00

27-Apr-12

Karvy

India Cement

Buy

119.00

87.00

26-Apr-12

ICICIDirect

India Cement

Hold

93.00

87.00

17-May-12

Angel Broking

JK Lakshmi Cement

Buy

79.00

10-May-12

SPA Securities

Mangalam Cement

Buy

193.00

132.00

17-May-12

Kotak Securities

Shree Cement

Accumulate

2,886.00

2,657.00

16-May-12

Emkay

Shree Cement

Accumulate

3,000.00

2,659.00

25-Apr-12

Emkay

UltraTech Cement

Reduce

1,290.00

1,437.00

25-Apr-12

GEPL Capital

UltraTech Cement

Accumulate

1,595.00

1,414.35

25-Apr-12

Karvy

UltraTech Cement

Hold

1,566.00

1,466.00

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stock performance Stock performance of leading cement companies As a regular service to our readers, we will provide here a listing of the latest in stock performance, keeping you up to date with the latest in stock trends. Additional company stock performance information is available on our website: www.cemweek.com/india.

Performance in the past 90 days Company

Start Date

Start Price

End Date

End Price

Difference

% Change

ACC LTD

3-Mar-12

1326.1

31-May-12

1140.2

-185.9

-14.02

AMBUJA CEME

3-Mar-12

167.3

31-May-12

151.05

-16.25

-9.71

BIRLA CORPOR

2-Mar-12

278.5

31-May-12

242.9

-35.6

-12.78

CCL INTER

3-Mar-12

38.2

31-May-12

29.8

78.01

CHETTINAD CEM

2-Mar-12

550

31-May-12

805.5

255.5

46.45

DECAN CEMENT

2-Mar-12

158.45

31-May-12

180.1

21.65

13.66

HEIDEL CEM

3-Mar-12

38.1

31-May-12

31.6

-6.5

-17.06

INDIA CEMENT

3-Mar-12

99.65

31-May-12

75.4

-24.25

-24.34

JK CEMENT

3-Mar-12

146.15

31-May-12

146.5

0.35

0.24

JK LAKSHMI

3-Mar-12

31-May-12

61.15

1.15

1.92

KAKATIYA CEM

2-Mar-12

81.95

31-May-12

81.25

-0.7

-0.85

KALYANPUR CE

7-Feb-12

25.9

14-May-12

5.1

19.69

KCP LTD

3-Mar-12

33.55

31-May-12

30.05

-3.5

-10.43

KEERTHI

29-Feb-12

29-May-12

26.5

-7.5

-22.06

MADRAS CEM

3-Mar-12

138.45

31-May-12

136.65

-1.8

-1.3

MANGALAM CEM

3-Mar-12

136.15

31-May-12

125.05

-11.1

-8.15

N C L IND

3-Mar-12

48.2

31-May-12

43.05

-5.15

-10.68

OCL INDIA L

3-Mar-12

104.85

31-May-12

79.95

-24.9

-23.75

PANYAM CEMEN

2-Mar-12

30-May-12

61.45

-8.55

-12.21

PRISM CEMENT

3-Mar-12

48.15

31-May-12

-0.15

-0.31

RAIN COMMODI

3-Mar-12

38.6

31-May-12

37.05

-1.55

-4.02

SAGAR CEM.

3-Mar-12

159.5

31-May-12

168

8.5

5.33

SHREE CEMENT

2-Mar-12

2786.15

31-May-12

2420.75

-365.4

-13.11

ULTRATECH CM

3-Mar-12

1402.85

31-May-12

1416.5

13.65

0.97

46 MAY/JUNE 2012

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Most popular on CemWeek.com The most-read stories on CemWeek over the past two months reflect the industry's mixed outlook. The India column shows the 20 most popular stories from CemWeek featuring India-related coverage, and the Global column shows the global events that gathered the most attention worldwide during the period. Visit CemWeek.com to access the full stories.

India

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

India cement demand increases in March Jaypee Cement launches new ad campaign India cement prices soften on weaker demand India cement prices softening ACC, Ambuja report higher production in April Ultratech Cement director resigns Rough times ahead for India cement? India cement sales slowed in April India: JK Cement sees huge growth in capacity Jaypee, SAIL inaugurate new facility in India FLSmidth wins Middle East order Foreign firms up India cement holdings UltraTech Q4 earnings rise, but isues profit warning Dalmia, GCC join WBCSD-CSI India cement demand seen rising in FY13 India: Court fines Jaypee for environmental violations India to issue mining licenses for cement, steel projects Fives acquires India’s CBL Combustion HeidelbergCement India director resigns Indian cement prices to remain pressured Ultratech in talks to acquire Mozambique quarry India cement makers seen posting lower profit margins India cement industry posts growth Firmer prices boost India cement makers Q1 haul India competition authorities to rule shortly

global

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Egypt determined to issue new licenses to cover shortfall Omani cement exports seen climbing this year Report: Cemex likely to post narrower Q1 loss Holcim says overcapacity eating at margins Lafarge restructures operations, moves to cut debt burden Italcementi awards Bulgaria production line to Sinoma Votorantim plans to sell off Cimpor stake to Camargo Tough choices for new Holcim chief Turkey: Lafarge unveils new ‘green’ cement Brazil’s CADE waiting on resolution of Camargo bid for Cimpor Camargo formalizes asset swap offer with Votorantim Malaysia’s YTL Cement orders new production unit Lafarge to build new units in Algeria Saudi: Najran cement to build new cement line Intercement says changes coming at Cimpor Sinoma operating income up 21.8% in Q1 Russia: Sinoma ties up with NMD Ural to build plant Tensions high in Angola cement plant project Brazil cement sales climb in April China cement production grows at slower pace in Q1 Pakistani cement prices called ‘disproportionate’ Foreign sales boost Cementos Molins Q1 profit Cementos Portland to return to profit by 2013 Pakistani cement prices called ‘disproportionate’ Foreign sales boost Cementos Molins Q1 profit

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RESEARCH

The CW Group publishes a series of unique data-rich reports on a periodic basis for the global cement sector. These must-have reports for cement traders, analysts, investors, equipment vendors are indispensable in understanding changing market conditions, monitor the latest cement prices, stay up to date on new cement capacity projects among many other key outlook and competitive dimensions. The reports are available on an annual subscription basis. Contact us at sales@cwgrp.com to learn more. Global Cement Market Data Service

Global Cement Retail Price Report

Global Cement Trade Price Report

Global Cement Volume Forecast Report

Cement Plant & Capacity Monitor

Statistical update on key cement markets worldwide

Comprehensive report on local retail cement prices worldwide

Detailed data and chart report on cement prices

Current and outlook for cement volumes

Tracking new cement plants and expansions

$475 per user / year

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$1,200 + S&H per user / year

$1,300 + S&H per user per year

Rolling monthly updates (Monthly updates)

Quarterly updates (4 updates per year)

Quarterly updates (4 updates included)

Semi-annual updates (2 updates included)

Updated every 2 months (6 updates included)

48 countries covered*

25 key markets

70+countries covered*†

Individual countries & global

Global scope, ex-China

■■ ■■ ■■ ■■

Cement consumption Cement production Cement trade and/or Select cement prices

Online (CemWeek.com)

■■ Actual retail prices per bag ■■ Range of prices and avareges ■■ Gray and/or white cement ■■ Weekly price data points Hard copy

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Gray, white and / or clinker Monthly import prices Monthly export prices Regional price indices Monthly trade volumes Hardcopy

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3-year volume outlook Historical volumes Capacity utilization Annual volumes Hardcopy

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New cement plants Plant expansions Overview of project Location details Hardcopy

* Subject to change; † Actual country data reported on different lags; S&H: Shipping and Handling for reports distributed in physical hardcopy;Discounted group and corporate rates available upon request

We know the cement industry well. Let us guide you. For more information please contact us at inquiries@cwgrp.com or on +1-702-430-17 48 848 N. Rainbow Blvd., Box #1658, Las Vegas NV, 89107, USA