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Gujarat Ambuja Lanka arm sales rise 42 pc — Looks for early mover gains

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KOLKATA, Sept. 26

AFTER establishing itself as one of the leading cement producing majors of India, Gujarat Ambuja Cements Ltd is making inroads into the neighbouring market of Sri Lanka. The company has in fact already emerged as one of the largest cement exporters from India.

Ceylon Ambuja Cement Pvt Ltd, popularly known as Ceylon Ambuja, is a wholly owned subsidiary of Gujarat Ambuja. This company recorded a 42 per cent increase in sales in terms of volume and 62 per cent in terms of value.

For the year ended March 31, 2002, the company sold 2.05 lakh tonnes of cement against 1.44 lakh tonnes in the previous year. In terms of value the sales of the company increased from Lanka rupee (LKR) 64.7 crore to LKR 104.7 crore. However, it registered a loss of LKR 4.99 crore.

Ceylon Ambuja was incorporated in July 1998 and it started operations in September 2002 and started registering profits from March this year. "We are reasonably confident that despite the challenges posed by the Sri Lankan economy, our decision to have a presence in the Sri Lankan market will be validated," Mr Suresh Neotia, Chairman of Gujarat Ambuja, stated.

It may be noted that for the first time since its independence, Sri Lanka posted a negative growth of 0.5 per cent. According to Mr Neotia, Gujarat Ambuja will continue to focus on increasing its presence in the southern Sri Lankan market. It is using the same brand name, `Ambuja Cement' in that market.

Gujarat Ambuja's share in the overall Indian cement exports is 37 per cent. Despite the sluggishness in the international cement market, the company has opened up new trading channels with Nigeria and Kuwait.

For the year ended June 30, 2002, Gujarat Ambuja's total exports were to the tune of 12.55 lakh tonnes against 8.84 lakh tonnes in the previous accounting year. In terms of value, exports increased to Rs 148.90 crore as against Rs 104.21 crore in 2000-01.

"We believe that after experiencing a glut in the international markets, demand for cement overseas will pick up in the coming years. That being the case now is the best time to seed and expand the export market. When the markets pick up, we will be in a position to draw the maximum advantage," Mr Neotia stated.

Gujarat Ambuja's total sales in 2001-02 were 71.84 lakh tonnes as against 61.07 lakh tonnes in the previous year, marking an increase of 18 per cent. In value terms, its sales increased by nine per cent to Rs 1,583 crore from Rs 1,448 crore in 2000-01. However, its sales realisation was lower by seven per cent due to lower cement prices.

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