Leading cement manufacturer, The Ramco Cements Ltd, continues to reap benefits through its ‘premiumisation’ focus as premium cement products are not only boosting margin levels, but also increasing their share in total revenue.

The ₹6,011-crore company had embarked on a strategy to differentiate itself from its peers as also to establish a very strong price-value proposition. It focused on manufacturing value-added products and initiated a drive with the theme `right cement for the right application’ to sell its premium cement products. The move was also aimed at justifying its premium price in the market, and retaining its position as the largest and most renowned cement manufacturer in south India.

It continued to strengthen its value-added portfolio through continuous innovation and rigorous testing. Ramco Research and Development Centre (RRDC) has played a significant role in its efforts to come out with diverse cement products, suited for various downstream applications.

The results have been enriching with growing traction for its premium cement products. The company has achieved success in bringing premiumisation positioning in a highly commoditised product like cement.

“In FY22, our premium product carved a revenue share of 22 per cent compared to 18 per cent in FY21, registering a 400 bps growth year-on-year. With premium product driving margins, our EBITDA per tonne of cement is expected to grow at a rapid pace in the foreseeable future,” says AV Dharmakrishnan, CEO of the company.

While the company continues to focus on premiumisation drive stronger, it is gearing up to commence a slew of new projects during this fiscal. 

The company’s Kurnool integrated plant greenfield expansion is running late due to the contractor not being able to execute the project within the estimated time. But the company is optimistic about achieving commercialisation this fiscal. This is expected to help the company cross the 20 million tonnes rated capacity milestone. Its current capacity is 19.40 MTPA (million tonnes per annum) and includes a 12.20 MTPA integrated cement plant and 7.20 MTPA satellite grinding units. 

Its other ongoing projects in Kurnool include 6 MW WHRS (waste heat recovery system), which is nearing completion and is expected to be commissioned this month, and 6.15 MW of WHRS and 18 MW of thermal power plant. These are expected to be completed by the end of this fiscal. This would not only ensure lower power costs and improved emission control but also make it more self-reliant. 

The company projects positive growth for the current fiscal. “Going forward, the cement industry is expected to head for a speedy recovery to reach 358 million tonnes in FY23, growing at 8% y-o-y, driven by increasing government spend on infrastructure and sharp focus on housing,” PR Venketrama Raja, Managing Director of the company, said in the company’s 64th annual report for FY22.

India’s cement production was estimated at 332 million tonnes in FY22, growing at 12 per cent y-o-y. 

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