Cement Update - JM Baxi & Co

Monthly Report December 2020 | 1

Monthly Report - DECEMber 2020

Cement Update


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

TABLE OF CONTENTS

JSW owned Shiva Cement to invest Rs 1,500 crore on clinker facility in Odisha

UltraTech to invest Rs 5,477 crore towards 12.8 mtpa capacity expansion

ACC and Ambuja Cement to invest Rs 780 crore to set up waste heat recovery power plants

Southern India sees boost in cement prices

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PORTANALYSIS

Cement Traffic at Indian Ports(Qty in Millions Tonnes)


CEMENT TRAFFIC AT INDIAN PORTS (QTY IN MILLION TONNES)

Port Name Apr-Oct 2020 Apr-Oct 2019 Variance Y-o-Y

BEDI 0.048 0 0.048

COCHIN 0.634 0.775 -0.141

DHAMRA 0 0.213 -0.213

DHARAMTAR 0.057 0.148 -0.091

GANGAVARAM 0 0.157 -0.157

GOPALPUR 0.025 0.075 -0.05

HALDIA 0.162 0.38 -0.218

JNPT 0.309 0.522 -0.212

KANDLA 0.008 0 0.008

KAKINADA 0.224 0.128 0.096

KARAIKAL 0 0.101 -0.101

KRISHNAPATNAM 0.571 0.415 0.156

MANGALORE 0.204 0.12 0.085

MUMBAI 0.024 0.006 0.018

MUNDRA 0 0.028 -0.028

PIPAVAV 1.397 1.578 -0.181

PORBANDAR 0.033 0.054 -0.021

PORT BLAIR 0.001 0.012 -0.011

TUTICORIN 0.125 0.103 0.022

Grand Total 3.822 4.812 -0.99


CEMENT IMPORTS - APR - OCT 2020 (QTY IN MILLION TONNES)

IMPORTER BANGLADESH COASTAL IRAN OMAN SRI LAN-KA U.A.E.

AMBUJA CEMENT LTD. 0 0.117 0 0 0 0

GLOBAL COAL & MINING PVT. LTD. 0 0 0.028 0 0 0

GP GLOBAL ENERGY PVT. LTD. 0 0 0 0.044 0 0

JSW CEMENTS & CO. 0 0 0.029 0.028 0 0

JSW STEEL LTD. 0 0 0 0 0 0.057

PENNA CEMENT INDUS. LTD. 0.025 0.05 0 0 0 0

RAMCO CEMENTS LTD. 0 0.078 0.105 0 0 0

RINTAC TRADING PVT. LTD. 0 0 0.053 0 0 0

ULTRATECH CEMENT LTD. 0 0.505 0 0 0.021 0

ZUARI CEMENTS LTD. 0 0.003 0 0 0 0

CEMENT EXPORTS - APR - OCT 2020 (QTY IN MILLION TONNES)

EXPORTERS BANGLADESH COASTAL MAURITIUS SRI LANKA

BHARAT CEMENTS 0.046 0 0 0

BHARATHI CEMENT 0.045 0 0 0.026

MY HOME INDUS. PVT. LTD. 0.011 0 0 0

PENNA CEMENT INDUS. LTD. 0 0.2 0 0.14

RAMCO CEMENTS LTD. 0 0.078 0 0

SAURASHTRA CEMENT LTD. 0 0.033 0 0

SUNRISE MINING CO. 0 0 0.002 0

ULTRATECH CEMENT LTD. 0 0.624 0 0.752

ZUARI CEMENTS LTD. 0 0.005 0 0


HIGHLIGHTSHIGHLIGHTS

• JSW owned Shiva Cement to invest Rs 1,500 crore on clinker facility in Odisha

• UltraTech to invest Rs 5,477 crore towards 12.8 mtpa capacity expansion

• ACC and Ambuja Cement to invest Rs 780 crore to set up waste heat recovery power plants

• Southern India sees boost in cement prices


• JSW Cement Managing Director Parth Jindal said,”The new clinker unit at Shiva Cement in Odisha will provide a strategic advantage to service the needs of our customers in the region and further strengthen JSW Cement’s leadership position in the Green category in India.”

Shiva Cement, a subsidiary of Parth Jindal-led JS Cement, will be investing Rs 1, 500 crore in a 1.36 million tonne clinker unit project to be established in Sundergarh district of Odisha

JSW owned Shiva Cement to invest Rs 1,500 crore on clinker facility in Odisha

through a combination of long-term debt and equity, the company said. “Once commissioned, this clinker unit will service JSW Cement’s manufacturing facilities across the East region and is expected to create around 500 direct & indirect job opportunities,” said Parth Jindal, JSW Cement’s managing director, during the media interaction. Shiva Cement has already received some of the regulatory and statutory approvals and is on track to obtain other necessary clearances, Jindal said. The company expects to commission the clinker unit by the end of next scal. The project includes setting up of a 1


per day capacity Clinkerization unit and L&T has been awarded the contract for Civil, Mechanical & Refractory erection work of the new clinker unit at Shiva Cement. For JSW Cement, the new clinker unit being established by Shiva Cement is part of its strategic roadmap to achieve 25 MTPA capacity by 2025, with a special focus on scaling up its presence in the Eastern region of India. “All business initiatives and investments are driven to achieve the targeted nancial, production and sales growth position and list the company publicly in the next few years,” Jindal said. The current expansion will also aid in a raw material integration with JSW Steel’s planned acquisition of the 3.5 million tonne (MT) Bhushan Power and Steel Ltd (BPSL) is also located in Odisha. “JSW Steel is set to acquire BPSL, given that they are present in the same location, there will be further raw material integration and security for this current unit,” Parth Jindal said. Shiva Cement’s plan to establish a new clinker unit further reairms the group’s commitment to investments in the State. The new clinker unit at Shiva Cement in Odisha will provide a strategic advantage, Jindal said.Source: Economic Times

million tonne per annum (1MTPA) grinding unit, 8 MW waste heat recovery power plant, 4 MTPA crushing plants at its dolomite and limestone mines. The company plans a 10 Km long overland belt conveyor to transport limestone from the mines to the manufacturing plant and own railway siding with 12 Km long railway track upto Sagra station to ensure seamless transportation of nished goods to the market. The Rs 1500 crore project will be serviced via debt to the extent of Rs 1.150 crore and JSW will invest 150 crore through redeemable preference shares and the remaining through a rights issue. JSW Cement has manufacturing units at Vijayanagar in Karnataka, Nandyal in Andhra Pradesh, Salboni in West Bengal, Jajpur in Odisha and Dolvi in Maharashtra. “This was always the plan, Clinker was coming all the way from Andhra Pradesh and the cost was very high along with some supply chain disruption taking place at any time. This is a very strategic investment for us,” Jindal said. Shiva Cement’s clinker project contracts have been awarded to Thyssenkrupp Industries India and Larsen & Toubro. Thyssenkrupp has been contracted to design and supply a new state of the art 4,000 tonnes


• Given its pan-India presence which will be further strengthened by the capacity expansion, UltraTech will be well-positioned to support the rising demand for cement in the country, Birla added.

UltraTech to invest Rs 5,477 crore towards 12.8 mtpa capacity expansion

Aditya Birla Group’s cement flagship company, UltraTech has announced Rs. 5,477 crore of investment on a mix of greenfield and brownfield capacity expansion of 12.8 million tonne per annum. This comes as the rst major investment of this size by a cement maker in recent years. “This significant investment in a core infrastructure sector will accelerate the wheels of economic activity and aid the kickstart of the private investment cycle,” said Aditya Birla Group’s chairman Kumar Mangalam Birla in a media statement. Given its pan-India presence which will be further strengthened by the capacity expansion, UltraTech will be well positioned to support the rising demand for cement in the country, Birla added. This expansion includes the existing approval for the cement plant at Pali in Rajasthan, in addition to the company’s 6.7 mtpa capacity expansion currently underway in Uttar Pradesh, Odisha, Bihar and West Bengal,

which has picked up pace and is expected to get commissioned by FY22, in a phased manner. The commercial production from the new capacities is expected to go on stream in a phased manner, by Q4FY23.“This capacity addition will not impact the ongoing deleveraging program which is on track to make UltraTech debt free by the time the expansion program is completed,” the company statement said. Upon completion of the latest round of expansion, the Company’s capacity will grow to 136.25 mtpa, reinforcing its position as the third largest cement company in the world, outside of China. Several cement companies had shelved their expansion plans due to a sluggish demand growth in FY20, followed by an economic slowdown during the rst half of FY 21 due to the viral pandemic-led lockdown. However, analysts and industry sources point that the healthy operating margins reported by companies in Q2 of FY21 have allayed fears of cashflow impairment and companies have resumed greenfield and expansion projects that were kept on hold. “The cement industry has been witnessing healthy volumes post relaxation of lockdown, on the back of the Government’s thrust on infrastructure, underlying demand from the rural economy and individual home builders,” Birla said.Source: Economic Times


• The WHRS will be installed at Ambuja Cement plants in Bhatapara (Chhattisgarh), Suli and Rauri (Himachal Pradesh) and Marwar Mundwa (Rajasthan), and at ACC plants in Jamul (Chhattisgarh) and Kymore (Madhya Pradesh). All projects are slated to be completed in the next 16 to 18 months.

ACC and Ambuja Cement to invest Rs 780 crore to set up waste heat recovery power plants

use waste heat from various sources like cement kilns, blast furnaces, sponge iron kilns, gas turbines, rand convert these to power, thereby reducing consumption of fossil fuels Both the companies set up their rst WHRS in 2013-14 at Rabriyawas (Ambuja Cement) and Gagal (ACC). “In addition to boosting efficiency, WHRS is a proven method for reducing CO2 emissions, and part of helping reach LafargeHolcim’s ambition to reduce emissions due to electricity use by 65% by 2030,” the company said. By deciding to set these six WHRS, Ambuja and ACC have moved one step closer to realising the company’s sustainability goals – reducing usage of fossil fuel and thus reducing carbon footprint, Akhoury said. In addition, to further reduce carbon footprint Ambuja and ACC have also adopted the use of solar power in their cement manufacturing process. Together, the two companies have an operational solar portfolio of 45.2 MWp, generating about 68.5 million units per year and a wind operating assets of 26.5 MW, generating ~45 million units / year. “Both companies have undertaken several CO2 reduction measures such as clinker factor reduction, thermal substitution rate, thermal & electrical energy efficiency, renewable energy and adoption of new technologies. Both companies’ CO2 emissions so far is around 530 kg and 512 kg CO2 per ton of cementitious material for Ambuja Cement and ACC respectively. “We are striving to further reduce their carbon emissions intensity to well below 425 kg per ton of cementitious material from its current level by the year 2030,” the company said.Source: Economic Times

Swiss building materials maker LafargeHolcim’s Indian operations, Ambuja Cement and ACC Ltd will be investing over Rs 780 crore to set up aste Heat Recovery System (WHRS) based power plants, a step towards reducing carbon emissions, the company said on Thursday. “Six cement plants at both Ambuja Cement and ACC will invest over Rs 780 crores in green power generation, which will lead to a signicant reduction of 5.61 lakh tons of carbon footprint annually. This is a major step in our journey towards reduction of carbon intensity,” said Neeraj Akhoury, managing director of Ambuja Cement. The WHRS will be installed at Ambuja Cement plants in Bhatapara (Chhattisgarh), Suli and Rauri (Himachal Pradesh) and Marwar Mundwa (Rajasthan), and at ACC plants in Jamul (Chhattisgarh) and Kymore (Madhya Pradesh). All projects are slated to be completed in the next 16 to 18 months. “This comes close on the heels of parent company LafargeHolcim signing the Net Zero Pledge with 2030 science-based targets during the Climate Week held in September 2020 in New York, USA,” the company said in a media statement. WHR power plants


• In the 3QFY21, the average price is up by around seven per cent YoY to INR360/bag.

Southern India sees boost in cement prices

prices in the region have been attributed to strong production discipline in the face of weak volumes. Prices in the north, west and central India are up seven, six and five per cent YoY, respectively. In the 3QFY21, the average price is up by around seven per cent YoY to INR360/bag. Sales volumes are also reportedly growing over 10 per cent YoY in north, east and central regions, while demand has remained weak in the south and Maharashtra.Source: Cement.com

Cement prices in southern India have advanced around 18 per cent YoY to INR393/bag (US$5.3) in the 3QFY20-21, according to Motilal Oswal. On a QoQ basis, prices are flat as hikes in November 2020 have offset the decline seen in the September-October period. The strong


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Cement Update - JM Baxi & Co

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