The Hindu Business Line : Rains hit production at Ambuja Cements

Mumbai, Sept 5 The production and dispatches of Ambuja Cements, which is on the verge of being taken over by Swiss cement major Holcim, were affected in August by monsoon.

The company shut its operations at Ambujanagar on August 8 due to heavy rains.

“Loss arising out of the flood is being estimated. However, the same is fully covered under insurance. All efforts are being made to restore normalcy at the earliest,” the company had said.

Despite expectation of a fall in prices during the monsoon, prices have remained almost stable or risen marginally in few places.

“The fact that the prices have not fallen during monsoon shows that demand is strong. We expect the prices to go up in September,” said an analyst.

Cement companies are pointing to high input cost for price escalations.

Mr T. Venkatesan, CEO of Dalmia Cement Bharat Ltd, was recently on record saying: “There is no local coal supply available. The cement companies have to be dependent on imported coal, which costs $80 a tonne, almost 60 per cent of the cement cost. The price has to go up.”

On a sequential basis, Ambuja Cements saw production in August fall to 19.28 per cent at 1.13 million tonnes against 1.40 million tonnes in July.

However, year-on-year production went up 8.86 per cent.

Dispatches were also down 17.26 per cent in August at 1.15 million tonnes against 1.39 million tonnes in July, but year-on-year, the figure was up 3.60 per cent.

Holcim owns over 36 per cent of Ambuja Cements and has announced an open offer at Rs 154 per equity share for an additional 20 per cent stake.

For the January-August period, Ambuja Cement saw production rise three per cent to 1.12 million tonnes, while dispatches were up 3.64 per cent to 1.12 million tonnes.

Another Holcim group company, ACC, reported 20.30 per cent jump in production in August at 1.60 million tonnes against 1.33 million tonnes logged in the same period last year.

Dispatches rose 14.59 per cent to 1.57 million tonnes in August.

During January-August, production was up 7.69 per cent at 13.44 million tonnes, while dispatches rose 7.70 per cent to 13.42 million tonnes.

ACC made substantial capacity additions at its Lakheri (Rajasthan) and Kymore (Madhya Pradesh) plants in the first quarter of the current fiscal.

The company is looking at a capacity of 22 million tonnes by 2008-end.

A large capacity addition is likely by 2009-end.

The Aditya Birla group’s cement production in August was up 17.10 per cent at 2.37 million tonnes, while dispatches increased 12.25 per cent to 2.36 million tonnes.

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