Cement, Energy and Environment

Gujarat Government to give cement industry a boost and hinted at making conducive environment for cement players so as to make Gujarat a Cement Capital of India. "Looking at the fast growth in infrastructure sector, we will add an additional 25 million tonnes of cement capacity in the state over next five to 10 years. The idea is to do value addition to the minerals which are in plenty here like the Lime stone. Our focus is not the investments alone, we want to promote innovation and value addition in the mineral industry," State Industry Minister Saurabh Patel said. The state government is focusing on developing 'Integrated mining cities'. As per the new limestone policy, cement companies are mandated to return 3 per cent of their annual production to the state government for building social infrastructure in backward areas. This will release additional 1.5 million tonnes of cement in the social sector. The state has rich mineral reserves of lignite, bauxite, limestone, mMgM~e. flooffi~~ bentonite, clay, silica sand , and dolomite. Of these, Gujarat has granite reserves worth 2500 million tonnes (MT) , marble worth 360 MT and limestone reserves worth 12,000 MT. "The Government wishes to encourage sustainable m1n1ng with due conservation of valuable resources at par with international best m1n1ng practice and to make use of the latest environmentally-friendly mining technology," Patel said. The Gujarat Mineral and Development Corporation (GMDC) has already invited EOI's for setting up cement plants having capacity of 2.4 to 8 million tonnes per annum (mtpa) and between 0.7 MTPA in Kutch and Surat districts, respectively. Cement makers like Reliance, Ambuja, Ultratech, Binani, J. K. Lakshmi, Jaypee cements are in final stage of their projects. Jaypee Group is coming up with a 4 million tonnes plant and ABG will set up a 2.5 million tonnes per annum plant. Ambuja Cements is also expanding its capacity and lndiabulls proposed setting up of 8 million tonnes per annum cement plant in Kutch with an estimated investment of Rs. 4,000 crore. "We are contemplating a 3 million tonnes per annum capacity plant at · Abdasa in Kutch district. We will be investing Rs. 700 crore in the project," said Shivamurthi Swamy, DGM of Ambuja Cement Limited. Courtesy: Civil Engineering & Construction Review, January 2011, Vo/.24, No.01, P52. BIG CEMENT COMPANIES BEING CHALLENGED BY MEDIUM AND SMALL LEVEL COMPANIES Experts believe small and mid tier companies are reaching beyond their traditional markets, posing a challenge to cement majors. Cement players like Dalmia Cement, Prism, Binani and J K Lakshmi among others are moving from their traditional markets and investing heavily in expanding foot print in other regions. "The capacity expansion announced by the top four in percentage terms is less compared to others. Also, these players are not doing any acquisition currently, which has started impacting their market share, " said a Mumbai- based investment banker. ACC, the country's second largest cement producer, whose volume market share witnessed an 8-year peak at 13.2 per cent FY2005, has seen a decline since then. Its share dropped at 11.8 per cent in 2008. ACC in its AGM in April 2010 had also said that the company will be working on improving its market share as it grew 2.3 per cent in 2009 against the industry growth of 10.3 per cent. Similarly, the AV Birla group , which, through group companies Grasim, Ultra Tech and Shree Digvijay Cement, commanded a market share of 20.49 per cent in FY 2005, saw it fall to 18.39 per cent in FY 2010. Grasim in 2008 sold Shree Digvijay Cement. It later hived off its cement business into a separate subsidiary called Samruddhi Cement, which in September 2010 got merged into Ultra Tech Cement. On the other hand, a mid-size player like Shree Cement, which had 2.39 per cent market share in FY 2005, is the sixth largest cement company with 4.69 per cent market share in FY 2010. Similarly, . Jai Prakash Associates has increased market share from 3.96 per cent to 5.3 per cent. An ACC spokesperson said, "We were constrained by lack of additional capacity as our projects had not come on stream. We have completed all the projects that were planned by us, bringing our capacity up to 27 million tonnes. We are taking steps to ramp up production at our new facilities, which will then give us additional ability," he said. An Aditya Birla Group spokesperson said, "Last year, 52 -