Dalmia Cement (Bharat), a subsidiary of Dalmia Bharat, mitigated a seasonally weak second quarter, banking on its current stock and prior orders. The agency intends to extend its cement grinding capability to 48.5 million tonne every year (MTPA) by March 2024, and utterly shift to renewable vitality by 2030, MD and CEO Mahendra Singhi mentioned. In an interview with FE’s Rajesh Kurup, Singhi mentioned the subsequent yr or two could be good for the sector. Edited excerpts:
The weak Q2, coupled with excessive vitality costs, impacted Dalmia Cement…
We achieved a gross sales quantity development of 6% year-on-year, whereas gross sales income rose by 11% in Q2. Power costs – energy and gasoline prices – have been the main points, however we had some stock and prior orders that helped us mitigate some influence. The outlook on prices appears to be higher and with demand additionally wanting up, the trade needs to be again to pre-Covid state of affairs by December.
What’s the standing of the $2-million plant in Bokaro?
It’s progressing as per schedule. We have now acquired the land, positioned orders for a cement mill and can quickly be beginning the development exercise. Throughout all our vegetation, we intend to succeed in a cement grinding capability of 36 MTPA by March 2022 (from 33 MTPA now) and 48.5 MTPA by March 2024.
The place will the capability additions are available from?
The Cuttack line has already been commissioned, and following the commissioning of Murli (Maharashtra) and Bokaro vegetation in two-three months, we are going to attain 36 MTPA. Over the subsequent two years, we are going to add new capability in Tamil Nadu, Bihar, Bokaro and in addition de-bottleneck our current vegetation. So, all these would result in 48.5 MTPA, and requires a capex of about Rs 9,000-10,000 crore over the subsequent three years. The capex could be raised primarily via inner accruals and debt.
Your plans to utterly shift to renewable vitality from the present use of thermal vitality by 2030.
That’s our dedication. We intend to remodel from thermal vitality and thermal electrical energy to renewable vitality by 2030. In a few years, we shall be popping out with a particular plan as we’re ready for proper coverage interventions.
We have now already began changing fossil gasoline. We’re gathering municipal waste – industrial wastes of assorted chemical substances, prescribed drugs and different corporations – from over 25 cities and cities, and utilizing it as inexperienced gasoline.
What’s the standing of divestment of Hippostores?
It was earlier authorized by the board and we’re finishing it quickly, earlier than the top of the present calendar yr.
What’s the common outlook for the trade? Analysts count on cement costs to rise.
From a cement demand perspective, it ought to form up effectively. On the cement costs, we consider that to some extent the trade would be capable to cross on the additional price, incurred because of excessive vitality prices, to customers. Within the subsequent two-three months, there could possibly be some softening of vitality prices following choices by the Chinese language authorities and the European Fee to include gasoline prices. They’re additionally exploring the opportunity of containing sea freight, which had greater than doubled within the final one yr.
India’s present put in cement capability is at about 500 million tonne. How a lot is that this anticipated to go up?
We consider that cement firms would add extra capability wherever they’ve limestone mines. In order that manner 4-5% addition in capability could possibly be anticipated over the subsequent few years. The highest 4-5 firms are additionally increasing capability. I consider roughly 30 MT of latest capability would get saved by FY23 or FY24.
Business was anticipating cement costs to rise after Diwali?
After Diwali, demand for cement within the nation is anticipated to develop by about 12%, bearing in mind the low base of final yr. If we disregard the low base, regular cement demand development could be 5-6%. For the cement sector, rural demand can also be vital which we count on to go up. The following 12-24 months needs to be good for the cement trade.