ACC expects market share to cross 11% this year

| | Updated on: Apr 13, 2011




ACC, one of the largest cement manufacturers, expects its market share to cross 11 per cent in 2011 from 10.2 per cent recorded in 2010.

(The industry despatched close to 200 million tonnes in 2010.)

Speaking to the media on the sidelines of the company's 75th annual general meeting, Mr Kuldip Kaura, Chief Executive Officer and Managing Director, ACC, said the company's overall capacity stands enhanced to 30 million tonnes per annum from 22 million tonnes last year with the expansion at Wadi in Karnataka and Chanda in Maharashtra completed.

“Post-expansion, we expect our market share to cross 11 per cent this year and our market share should show a significant improvement from the first quarter of this year,” he added.

ACC, along with its group company Ambuja Cement, commands a 21 per cent market share, while UltraTech Cement, an Aditya Birla Group company, has a market share of 20 per cent. The share of big cement companies has fallen in the last few months with the overall market capacity increasing substantially, said an analyst.

The company, which had invested Rs 825 crore in the Wadi and Chanda expansion, plans to consolidate the benefits before deciding on any major capital expenditure.

“Besides investing in brownfield expansions, we are open to inorganic growth if any interesting opportunities come our way,” said Mr Kaura.

While ruling out the merger of Ambuja Cements with itself, ACC has proposed to merge three of its subsidiaries — Lucky Minmart, National Limestone and Encore Cement and Additives.

The industry expects an additional capacity of 27 million tonnes to go on stream this financial year. With the bulk of the capacities coming up in the South, the demand-supply imbalance in 2011 would continue to be a cause of concern in the South, said Mr Narotam Sekhsaria, Chairman, ACC, in the company's annual report.

Input prices

The dwindling availability of linkage coal and the move to sell high-grade indigenous coal at international prices are likely to impact power and fuel costs.

The prices of other major inputs, mainly slag, gypsum and fly ash are likely to harden further in 2011, while the increase in petroleum product prices would continue to impact freight costs. Besides, a shortage in railway wagon availability may adversely impact despatches in the peak months, he added.

ACC expects strong demand, robust consumption and savings and investment rates to help the country achieve the projected GDP growth of 8 per cent in 2011-12.

While the growth outlook remains strong, in the near term, there are a number of challenges facing the economy such as high inflation, particularly in food prices, a widening trade deficit, deceleration in corporate spending and the hardening of global energy prices. Concerted and coordinated monetary, fiscal and policy measures are required to tackle these challenges head-on, he said.

The company's shares on BSE were up two per cent at Rs 1,117 on Wednesday.

Published on May 02, 2011

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