chapter iii profile of the india cements...
TRANSCRIPT
CHAPTER III
PROFILE OF THE INDIA CEMENTS LIMITED
In this chapter, an attempt is made to present an overview of the India
Cements Limited, Tirunelveli. It deals with the origin history of the India Cements
Limited, company high lights, organisational structure, production and sale of
cement, region wise growth, installed capacity, types of cement produced.
3.1. ORIGIN
The India Cements Limited is a registered Public Company established on
21st February 1946 at Sankar Nagar in Tirunelveli district. The company got in
delicate shape by the entrepreneurs S.N.N. Sankaralinka Iyer and T.S.
Narayanaswamy. Sankar Nagar which is a small village in the forties blossomed
into importance with the advent of The India Cements Limited one the major
cement manufacturers in an area of 124 acres of land. The India Cements Limited
was registered in the year 1946 for manufacturing cement. The registered office of
the company in Chennai. The main plant is situated at ‘Sankar Nagar’ at
Tirunelveli district; Sankar Nagar is just 4 kilometer away from the Tirunelveli
Jucntion. Apart from this, the company has another cement factory at ‘Sankari’ at
Salem.
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3.2 HISTORY OF THE INDIA CEMENTS LIMITED
1946 - The Company was incorporated on 21st February, at Chennai. The
Company runs two cement factories, one at Sankarnagar in the Tirunelveli district
and the other at Sankaridurg in the Salem District of Tamil Nadu State. It also
runs a foundry at Nadambakkam near Chennai City.
1956 - 1,60,000 Right equity shares issued at par in the proportion 4
shares for every `175 paid-up equity capital.
1957 - Deferred shares converted into Equity shares of ` 5 each in
proportion 1:1, Dividend rate of preference shares altered to 7.5 per cent.
1958 - In August, Equity shares of ` 25 each subdivided. 7,29,650
Rights Equity shares then issued in proportion 1:3.
1959 - In December, 3,500 Preference shares and 30,350 Equity shares
were allotted to Essen Private, Limited and Managing Agents. At the same time,
40,000 Number of Equity shares allotted to the directors of the Managing
Agents. In November 1960, 15,00,000 Right Equity shares issued at par in
proportion 1:2.
1961 - 25,00,000 Right Equity shares issued at par in the proportion 5:9.
1965 - In October, the Company acquired foundry machinery and other
fixed assets from Microtec Casting Private Limited.
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1969 - Issued 29,00,000 Bonus Equity shares in the proportion 2:5.
1984 - 33,350 - 7.5 per cent cumulative preference shares of `100 each
were converted into 13.5 per cent secured redeemable non-convertible debentures
of `100 each from 1st April.
1985 - A crushing-cum-screening plant was installed at Sankarnagar. The
quarries at the Sankari factory were modernised and the third captive DG set was
installed at Sankarnagar plant.
In order to convert the Sankarnagar plant to a more fuel efficient
process, the Company accepted the proposal of Blue Circle Industries., U.K., for
setting up a 3,000 tonnes per day precalciner dry process kiln adopting the latest
technology.
On the 20th February, the Company allotted 33,350-15 per cent secured
redeemable non-convertible debentures of `100 each in conversion of 33,350 - 7.5
per cent cumulative preference shares of `100 each. The debentures are
redeemable on or after 7 years but not later than 10 years from the date of
allotment.
Also, 6,00,000 - 15 per cent secured redeemable non-convertible
debentures of `100 each were privately placed with LIC, GIC and its subsidiaries
to be redeemed in 5 equal instalments commencing from the end of the 5th year
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and ending with the 9th year from the date of allotment at a premium of 5 per cent
at the end of the 7th year.
10,00,000 - 20 per cent non-convertible redeemable debentures of `100
each were privately placed with LIC, UTI and GIC.
1986 - Larsen and Toubro was appointed as the Indian Consultant.
The company considered various technical options for converting the wet
process factory at Sankaridurg to dry process to avoid losses arising out of
periodic rise in coal prices.
1987 - Dry process kiln with preheater was erected.
For improving the economic viability of the foundry, it was proposed to
delink the division from the Company by transferring it to a subsidiary.
1988 - On 1st November, ICF Foundries Limited was incorporated to
delink the foundry from the cement division.
1989 - In the last quarter of the year as a measure of forward integration,
the Company entered the business of real estate and property development.
1990 - The company was granted a licence by the Ship Acquisition
Licensing Committee for purchase of 4 dry bulk cargo vessels.
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On 29th November, after obtaining necessary approvals, the Company
took possession of the cement division of Coromandel Fertilisers, Limited in
Chilmakur village, Cuddapah District, Andhara Pradesh.
The Company's overall installed capacity increased to 2.6 million tonnes
representing 12.5 per cent of total capacity in South India and 34 per cent of the
total capacity in Tamil Nadu.
In order to part finance the modernisation programme at Sankarnagar, the
Company offered during February/March, 10,29,000 - 12.5 per cent secured fully
convertible debentures of `125 each. Out of the total issue, 9,80,000 debentures
were offered to the equity shareholders of the Company in the proportion of 1
debenture for every 5 equity shares held and 49,000 debentures were offered to
the employees of the Company (Including the retention of oversubscription, a
total of 11,71,660 debentures were allotted).
The conversion of the debentures was to take place at two stages. In Part
I 58,58,300 number of equity shares were allotted and in Part II 52,27,848 number
of equity shares were allotted. The holders of 622 debentures opted for this
conversion. The holders opted for the original terms of conversion. Accordingly,
2,777 number of equity shares were allotted on 21.10.1992.
1991 - Due to fire accident in September, two of the three furnaces were
damaged affecting production for more than three months.
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The Company acquired two bulk cargo carriers with 53,644 DWT and
43,300 DWT tonnes capacity and named as India Cements Limited Rajarajan and
India Cements Limited Jayamkondan respectively.
The Company acquired controlling interest in the Sick Industrial
Chemicals and Monomers, Limited. (ICML) which runs a calcium carbide unit
adjacent to the Company's Sankarnagar plant.
1992 - In accordance with the approval of shareholders India Cements
Limited Foundries, Limited the wholly owned subsidiary of the Company, took
over the supervision of the operations of foundry division with effect from 1st
July.
The Company acquired two more bulk cargo carriers. The Company
handed back the time chartered vessels to the owners.
The performance of the shipping division was affected by the
unprecedented delays at various ports in India for the discharge of fertilizer cargo
in the wake of change in Government policy on the Fertilizer Industry.
During April, the Company issued 31,97,230 Rights equity shares of `10
each at a premium of `40 per share in the proportion of 1:5. Additional 4,79,584
shares were allotted to retain oversubscription. Allotment of 90 shares was kept in
abeyance.
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Another 1,59,861 number of equity shares of `10 each at a premium of
`40 per share were offered to the employees. Additional of 23,979 shares were
allotted to retain oversubscription.
The Company issued 14 per cent cumulative redeemable preference shares
of `100 each aggregating to `6.25 crore to financial institutions. These shares will
be redeemed at a premium of 5 per cent in 3 equal annual instalments on the
expiry of 8th, 9th and 10 years from the date of allotment.
1993 - The Company acquired a vessel named India Cements Limited
Vikrama. The Shipping Division chartered 4 foreign flag vessels for the purpose
of carrying coal from Australia to India. During June, the Company issued
49,62,372 Rights equity shares of `10 each at a premium of `60 per share in the
proportion of 1:4. All were taken up except 137 equity shares, the allotment of
which was kept in abeyance because of court orders.
1994 - An upgradation/utilisation of equipment programme was undertaken
and its capacity was also being upgraded to 1.1 million tonnes per annum.
The Shipping Division acquired its 4th bulk carrier m.v. India Cements
Limited Partibhan of 55,882 DWT.
77
Though freight rates were higher during the year, the Shipping Division
could not accrue the full benefit as two of its ships were drydocking during
January/March 1995, leading to a loss of 60 operating days.
On 18th October, the Company offered Global Depository Receipts
(GDRs) for U.S. million at the price of U.S. .5 per, GDR/share involving issue of
58,57,987 GDRs/shares. One share will be issued in respect of one GDR.
India Cements Limited Foundries Limited Industrial Chemicals and
Monomers Limited. and India Cements Limited Financial Services and India
Cements Limited International Limited. are all subsidiaries of the Company.
1995 - Production and sales of Foundry Division was affected due to
unscheduled load shedding/power trippings.
The Company acquired its fifth Bulk carrier, m.v. `India Cements
Limited Raja Mahendra', 47893 DWT. 8 Voyages were also performed through
chartered vessels.
15,00,000 number of equity shares of `10 each (premium of `205) for
share allotted on preferential basis against warrants. 321,68,291 bonus shares
allotted in proportion 1:1.
1996 - The Company undertook to set up a new energy efficient cement
mill at its Sankarnagar plant.
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During the year the Shipping Division had to brave rough weather with
freight rates continually falling and of freightment contracts being hard to come
by.
1997 - As part of its ongoing diversification activities, the `900-crore
India Cements Limited (ICL) is setting up a sugar manufacturing facility, India
Cements Limited Sugars Limited, in Mandya District of Karnataka.
India Cements Limited. through its group companies India Cements
Limited Securities Limited (ICLS) and India Cements Limited Financial Services
Limited (ICLFS) had acquired about 40 per cent of the paid-up capital of Aruna
Sugars Finance Limited from the Aruna Sugars and Enterprises Limited (ASEL)
for a consideration of `6.08 crore.
The Chennai-based India Cements Limited (ICL) is set to acquire
Cement Corporation of India's (CCI) Yerraguntla (Andhra Pradesh) unit with CCI
recommending the name of the former to the Industry Ministry, India Cements
Limited has recently diversified into sugar by setting up a 2,500 sugar factory at
Mandya in Karnataka. The cement major, India Cements Limited (ICL), has
floated a new venture, styled Coromandel Electric Company Limited, to set up a
collective captive power plant.
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India Cement has emerged as a winner in the takeover race after Gujarat
Ambuja Cements Limited, the only other company in the race, backed out at the
last stage alleging foul play in the takeover process.
India Cements Limited (ICL) has set its sights on Raasi Cement. It is
preparing to mount a takeover bid, which if successful, would give the Madras-
based India Cements Limited, country's second-largest cement capacity after
ACC.
India Cements Limited signed a memorandum of understanding (MOU)
with CCI on December 10, and completed the takeover formalities on January 21.
1998 - India Cements Limited also commissioned its new 0.9 million
tonne per annum plant at Dalavoi in Tamil Nadu in the later part of financial year
1997.
After the successful takeover of Raasi Cement, India Cements has
initiated the process of merging the former with itself having reconstituted the
entire board of Raasi.
The India Cements Limited (ICL), with annual capacity of seven million
tonnes per annum, has launched its premium brand `Coromandel King -- Superior
53 Grade Cement'.
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1999 - The India Cements share price has been rising sharply in the past
fortnight, by about 26 per cent to close at ` 38 on March 31.
An agreement was linked with BOBL in November last and all formalities
were completed.
2000 - The Company in a bid to further reinforce its leadership position
in the region, has entered into a marketing tie-up with Andhra Pradesh (AP)-based
0.6 million tonne Panyam Cement.
The Company has entered into an agreement with Panyam Cement and
Mineral Industries Limited for distribution and marketing of cement.
Chennai-based Indian Cements is learnt to have held talks, or is in the
process of holding talks, with at least two multinational cement companies -- Blue
Circle and Cemex -- to set up joint venture company.
The Cement major India Cements has launched a comprehensive portal on
home-making.
2001 - India Cements, is finalising plans to reduce its manpower strength
by around 700 during the current financial year
2002 - Board decided to sell the 39 per cent equity shares of Sri Vishnu
Cement and has signed a Share Purchase Agreement with Zuari Cement Limited
company enters into an agreement with Citibank.
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IDBI appoints Mr J Jayaraman as the Director on the Board. Negotiates
with financial Institutions led by IDBI for its debt restructuring. The Board of
India Cements scraps the resolution to pay 11.5 per cent preference dividend.
Posts a net loss of `910.9 million as compared to net loss of `192.5 million, for
the same period last year. Files a corporate debt-revamp plan to the financial
institutions.
2003 -The Board co-opted Mr N D Pinge as the Nominee Director in
place of Mr N Biswas who ceased to be the Director consequent to withdrawal of
nomination by ICICI Bank Limited.
It is restructuring its debt under Corporate Debt Restructuring Systems
and the details of the restructuring package which includes VRS, sale of assets,
restructuring of debt including working capital facilities. The restructuring
proposal provides for various exit options for secured and unsecured lenders with
different yield and maturity. The package is subjected to annual review based on
which it is modified. Appoints Mr. M V Mohammad Meeran as the Director on
the Board of the company.
2004 -The company through its special purpose vehicle M/s Coromandel
Electric Company Limited has commissioned a (gas based) captive power plant at
Ramanathapuram for a capacity of 17.4 MW and the same has started supplying
power from the month of November 2004
82
2005 -The Company has successfully completed an equity issue in the
international market during October 2005 by issuing 25,613,796 Global
Depositary Shares (GDSs) at USD 4.3226 per GDS, (each GDS representing
2 underlying equity shares of `10 each) and raised an amount of ` 497 crore
including a premium of ` 446 crore.
2006 -India Cements signs MOU with Government of Himachalpradesh
Sri T Dulip Singh, one of the Director on the Board of the Directors, expired on
November 19, 2006. The Company has issued unsecured Zero Coupon
Convertible Bonds due 2011 (FCCBs) for US Million to investors outside India
at an initial conversion price of `305.57 per share.
2007 -India Cements Limited has coopted Mr. Ashok Shah, Zonal
Manager (New Delhi), Life Insurance Corporation of India, in the place of
Mr. P N Jambunathan. India Cements Limited has co-opted Mr. K Subramanian,
representing Housing and Urban Development Corporation Limited (HUDCO), as
an additional director of the Company.
The Hon'ble High Court of Judicature at Madras vide its order dated 25th
July 2007 sanctioned the scheme of amalgamation of Visaka Cement Industry
Limited with The India Cements Limited. The Company has converted the
Sankari plant from wet process to dry process and commissioned the plant.
The Company has privately placed 2,07,89,000 equity shares at a price of
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`285 per share (including premium of `275 per share) by way of Qualified
Institutional Placement in December 2007
2008 -The Company has revived its shipping business with the purchase
of two ships (dry bulk carriers) with a total capacity of 79843 DWT. -The
Company has successfully bid for the Chennai franchise of the DLF-IPL 20/20
Cricket Tournament –“Chennai Super Kings”. The Company has completed and
commenced commercial production of one million tonne grinding plant at
Chennai.
2009 -The Company has completed and commenced commercial
production of one million tonne grinding plant at Parli (Maharashtra). The
Company’s subsidiary, namely, Trishul Concrete Produts Limited has completed
and commenced commercial production of one lakh Cu.M ready mix concrete
Plant at Hyderabad (Andhra Pradesh). The II line of 1.2 million tonnes at
Malkapur was commenced operations from March 2009 The upgraded capacity
of kiln I to 3000 TPD (1700 TPD) at Vishnupuram started functioning from April
2009.
3.3 TIRUNELVELI CEMENT WORKS (SANKARNAGAR)
The India Cements Limited (ICL) is the largest producer of cement in
South India with a production capacity of 3.5 million tonnes of cement per annum
84
and a market share of 14 per cent. The Company operates seven cement plants,
three of which are in Tamil Nadu and one in Andhra Pradhesh.
India Cements Limited markets its cements in two premium brands,
namely, "SANKAR CEMENT" and "COROMANDEL CEMENT" and is a
market leader in Tamil Nadu and Kerala and overall in the South. It distributes its
cement through a network of over 2,700 stockists.
The Company, incorporated in 1946, set up its first cement plant at
Sankarnagar, Tirunelveli District, Tamil Nadu in 1949. This plant was modernised
to a million tonne dry process cement plant in 1990. The Second cement plant at
Sankari, Salem District, Tamil Nadu, which was set up in 1963 now has a
capacity of 0.6 million tonnes. India Cements Limited's third cement plant at
Chilamakur, Cuddapah District, Andhra Pradesh was acquired in November 1990
and is a one million tonne dry process cement plant.
India Cements Limited has just commissioned its fourth cement plant at
Dalavoi, Perambaiur District, Tamil Nadu, with a capacity of 0.9 million tonnes
on the state-of-the-art dry process technology. On 17th September 1997, India
Cements Limited acquired all the issued shares of Visaka Cement Limited a 0.9
million tonnes per annum cement plant coming up near Tandur in Ranga Reddy
District, Andhra Pradesh. With this acquisition the capacity of India Cements
Limited will raise to 4.4 million tonnes on completion of the project. India
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Cements Limited has also acquired the Yerraguntla plant and that will raise its
capacity to 5 million tonnes per annum.
3.4 HIGHLIGHTS OF THE COMPANY
The Company is the largest producer of cement in South India. The
Company's plants are spread with three in Tamil Nadu and four in Andhra
Pradesh which cater to all major markets in South India and Maharashtra. The
Company is the market leader with a market share of 28 per cent in the South. It
aims to achieve a 35 per cent market share in the near future. The Company has
access to huge limestone resources and plans to expand capacity by de-
bottlenecking and optimisation of existing plants as well as by acquisitions.
The Company has well established brands-Sankar Super Power, Coromandel
Super Power and Raasi Super Power. Regional offices in all southern states and
Maharasthra with officers/representative in every District
3.5 FUNCTIONS AND ACTIVITIES OF THE INDIA CEMENTS LIMITED
Sankarnagar plant was established in the year 1949. At present
Sankarnagar plant has been modernized. Initial capacity of 10,000 tonnes has
been increased to 1.55 million tonnes. In response to Government call for an
expansion in domestic production capacity to build 2 further wet process kilns at
Sankarnagar in mid 60's bringing annual capacity to dry process and existing wet
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process kiln were replaced with a modern single dry process kiln, increasing
capacity of the plant to 1 million tonnes per annum. Now the company initiated
measures to set up a new cement mill for grinding cement at Sankarnagar at an
estimated project cost of ` 20 crore.
3.6 ORGANISATIONAL STRUCTURE
The board of directors consists of seven members including the chairman,
managing director and the government nominee, governs the company. The
managing directors have full powers over the affairs of the company.
Chairman (Board of Directors)
Managing Directors
CS MPA GM
DY.GM CE (M) CC DY GM FM
CS - Company Secretary
MPA - Manager (Personal and Administration)
GM - General Manager
DY. GM - Deputy General Manager (Mines)
CE (M) - Chief Engineer (Mechanical)
CC - Chief Chemist
DY - GM (CS) - Deputy General Manager (Engineer)
FM - Finance Manager
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3.6.1. List of the Associate /Subsidiary Companies of the India Cements
Limited
Industrial Chemicals and Monomers Limited : Subsidiary Company
India Cements Limited Securities Limited : Subsidiary Company
India Cements Limited Financial Services Limited : Subsidiary Company
India Cements Limited International Limited : Subsidiary Company
Trishul Concrete Products Limited : Subsidiary Company
Indo Zinc Limited : Subsidiary Company
PT.Coromandel Minerals Resourses,Jakarta,Indonesia : Subsidiary Company
Coromandel Minerals Private Limited. Singapore : Subsidiary Company
Coromandel Electric Company Limited : Associate Company
Unique Receivable Management Private Limited : Associate Company
Coromandel Sugars Limited : Associate Company
India Cements Capital Limited : Associate Company
Raasi Cement Limited : Associate Company
Coromandel Travels Limited : Associate Company
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3.6.2 Performance Indicators
TABLE 3.1
KEY PERFORMANCE STATISTICS IN THE INDIA CEMENTS LIMITED
1994 1995 1996 1997 1998 1999
Cement Production
(Million tonnes) 2.3 2.4 2.6 2.5 3.0 5.5
Sales and Other
Income(`Million) 5499.7 6290.8 8064.4 8325.0 9273.1 13918.4
Net Profit/(Loss)
Before Tax
(`Million)
184.8 472.8 809.0 825.8 627.6 870.4
Cash Generated
(`Million) 422.3 721.1 1173.7 1266.1 1128.7 1566.9
2000 2001 2002 2003 2004 2005
Cement Production
(Million tonnes) 6.0 6.0 4.85 4.95 5.41 5.49
Sales and Other Income
(`Million) 14196.6 14513.7 13132.5 10330 12368.8 14023.0
Net Profit/(Loss) Before Tax
(`Million) 473.1 511.5 (75.7) (3072.3) (1127.3) 45.8
Cash Generated (`Million) 1212.0 1341.6 799.4 (2258.2) (312.2) 833.5
2006 2007 2008 2009 2010
Cement Production
(Million tonnes) 7.26 8.42 9.23 9.11 10.5
Sales and Other
Income (`Million) 18366.9 26208.8 36056.1 39545.3 42216.9
Net
Profit/(Loss)Before
Tax (`Million)
499.8 4919.6 8446.4 6483.0 5313.2
Cash Generated
(`Million) 1241.8 5814.6 9624.3 9309.7 7208.7
Source: www.indiacem.co.in
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3.6.3 Number of Shareholders in the India Cements Limited
TABLE 3.2
NUMBER OF SHAREHOLDERS IN THE INDIA CEMENTS LIMITED
Year Number of shareholders
1995 16399
1996 17155
1997 18037
1998 22226
1999 33195
2000 37682
2001 39304
2002 44343
2003 51030
2004 45441
2005 49882
2006 48256
2007 117751
2008 72814
2009 78995
2010 101395
Source: www.indiacem.co.in
3.6.4 Production and Sale of Cement in the India Cements Limited
Production and sale of cement during the financial year 2009-10 as
compared to previous year is, as under:
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TABLE 3.3
PRODUCTION AND SALE OF CEMENT IN THE INDIA CEMENTS
LIMITED
2008-09
in lakh tonnes
2009-10
in lakh tonnes
Production Clinker 69.83 86.82
Cement 91.11 104.94
South Clinker 0.02 4.63
Cement 91.18 105.00
Total Sales 91.20 109.63
Source: Annual Report 2010
TABLE 3.4
INDUSTRY PERFORMANCE OF THE INDIA CEMENTS LIMITED
Parameter 2009-10 2008-09 Per cent of
change
Production 116.12 102.85 +12.90
Despatches 115.44 102.41 +12.72
Export 1.15 1.49 -22.81
Capacity Utilization 83 84 -
Sources: www.indiacements.co.in
The overall capacity utilisation of the company was at a record 105 per
cent and was higher than the capacity utilisation of some of the majors in the
country. During the year, the company had successfully completed the conversion
of the Sankaridurg Unit from wet process to dry process and the new plant has
stabilised quickly.
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3.6.5 Region Wise Growth in Cement Demand of the India Cements Limited
A review of regional pattern of growth in cement demand reveals the
following:-
TABLE 3.5
GROWTH IN CEMENT DEMAND OF THE INDIA CEMENTS LIMITED
Region 2008-09 2007-08
North 4.787 12.17 per cent
East 11.31 5.65 per cent
South 10.36 9.71 per cent
West 5.40 14.00 per cent
Central 10.44 6.05 per cent
Overall 8.40 9.80 per cent
Source: Annual reports of the India Cements Limited
TABLE 3.6
PRODUCTION AND CONSUMPTION OF THE INDIA CEMENTS
LIMITED
Region
Production
(MTPA) per cent
Change
Consumption
(MTPA) per cent
Change 2009-10 2008-09 2009-10 2008-09
North 24.51 20.54 19.33 17.06 14.98 13.89
East 15.51 13.20 17.50 16.17 13.10 23.44
South 43.23 40.02 8.02 34.18 32.75 4.37
West 14.77 13.67 8.05 17.14 15.33 11.81
Central 18.08 15.41 17.33 15.59 12.51 24.62
Total 116.10 102.84 70.23 100.14 88.67 78.13
Source: Annual reports of the India Cements Limited
92
It can be observed that south in which the company’s main markets are
situated has registered a growth of 10.36 per cent over and above 9.71 per cent
growth achieved in the previous year. This has clearly paved way for more
remunerative prices in the market.
Taking into account a dormant capacity of 5 to 6 million tonnes, the
industry has been operating to its full capacity for the past two years resulting in
more pockets of shortages in the far flung areas of the country. The real
unsatisfied demand in the country is yet to be established as the industry has been
measuring the demand based on the despatches made. Given the thrust by the
Government for the infrastructure development including roads, ports, air-ports,
power plants and special economic zones and also for housing, satellite township
and irrigation projects, it is believed that the cement demand will grow over 10
per cent in the future. This implies that significant capacity would be required to
catch up with this growth in demand and the new capacities have also been
announced and are under creation towards this end. However, given the delays
that are occurring in the execution of new projects on account of bottlenecks in
the supply side of major equipments and availability of erection contractors,
delays in commissioning of new capacities cannot be ruled out and hence the
present buoyant situation is likely to continue till new capacity actually
materializes to satisfy the growth in demand.
93
On the fiscal side, the Government has taken a lot of measures in the
previous year including removal of import duty and counter vailing duty on
cement and has also introduced slab rates of excise duty of cement linked to
maximum retail price which has been further modified during the year with
increase in tariff rate from `600 to `900 per million tonnes. However, given the
buoyant demand, the industry was able to pass on this impact to the consumer.
During the year there was a steep hike in the delivered prices of imported coal
caused by the increase in freight and increased demand for coal from developed
countries. The cost including freight prices of imported coal which was around 55
– 60 US dollars in March 2007 rose to a level of 110 – 120 US dollars towards the
end of March 2008 causing a huge adverse impact on the cost of production of
cement for many of the units relying on imported coal.
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3.6.6 Cement Production in the India Cements Limited
TABLE 3.7
CEMENT PRODUCTION IN THE INDIA CEMENTS LIMITED
Five Year
Plan At the end of year
Installed Capacity
(in Million tonnes)
Cement Production
(in Million tonnes)
Target Achieve-
ment Target
Achieve-
ment
Avg. Annual
growth thru'
Plans( per cent)
Pre Plan 1950-1951 - 3.03 - 2.20
I Plan 1955-1956 5.31 5.20 4.80 4.60
II Plan 1960-1961 16.00 9.30 13.00 7.97 14.70
III Plan 1965-1966 15.00 12.00 13.00 10.97 7.53
There were no Reannual Plans for 1966-1967, 1967-1968 and 1968-1969
IV Plan 1973-1974 Not
Fixed 19.76 18.00 14.66 4.00
V Plan 1978-1979 23.50 22.58 20.80 19.42 6.50
VI Plan 1984-1985 43.00 42.00 32.50 30.13 11.00
VII Plan 1989-1990 62.00 61.55 45.00 45.41 10.10
Annual Plan 1990-1991 64.36 49.00 48.90 7.70
1991-1992 66.56 55.00 53.61 9.60
VIII Plan 1992-1993 70.19 56.00 54.08
1993-1994 76.96 59.00 57.96
1994-1995 83.79 61.50 62.35
1995-1996 95.76 68.00 69.63
1996-1997 105.25 76.00 76.22 8.43
Annual Plans 1997-1998 110.51 81.00 83.16 9.11
IX Plan 1998-1999 118.97 90.00 87.91 5.71
1999-2000 119.10 94.00 100.45 14.26
2000-2001 132.61 107.00 100.11 (-) 0.34
2001-2002 146.13 105.00 108.40 8.08
X Plan 2002-2003 (EST) 148.63 115.45 117.35 8.26
2003-2004 (EST) 155.40 120.02 123.50 5.24
2004-2005 (EST) 153.59 127.57 3.30
Source: www.indiacements.co.in
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3.6.7 Large Plants in the India Cements Limited
TABLE 3.8
LARGE PLANTS IN THE INDIA CEMENTS LIMITED
Companies (Members)(Numbers) 54
Cement Plants(Numbers) 129
Installed Capacity(Million Tonnes) 153.59
Cement Production (Million Tonnes) 127.57
Manpower Employed (Numbers) approximately 1,35,000
Source: www.indiacements.co.in
3.6.8 Mini Plants in the India Cements Limited
TABLE 3.9
MINI PLANTS IN THE INDIA CEMENTS LIMITED
CementPlants
(Numbers)(approximately) 365
InstalledCapacity
(Million Tonnes) (Estimated) 11.10
CementProduction
(Million Tonnes) 6.00
Source: www.indiacements.co.in
96
3.6.9 Region wise Capacity and Production of the India Cements Limited
TABLE 3.10
REGION WISE CAPACITY AND PRODUCTION OF THE INDIA
CEMENTS LIMITED
Region
Installed Capacity
as on 31.03.2005
(million tonnes)
per cent of
total Capacity
Cement
Production (Million
tonnes.)
per
cent
to total
Prodn.
Northern 27.65 18.0 26.71 20.9
Eastern 22.96 15.0 18.73 14.7
Southern 48.6 31.6 38.98 30.6
Western 29.38 19.1 22.76 17.8
Central 25.0 16.3 20.39 16.0
Total 153.59 100 127.57 100
Source: www.indiacements.co.in
3.6.10 Plant Size wise Capacity and Production of the India Cements Limited
TABLE 3.11
PLANT SIZE WISE CAPACITY AND PRODUCTION OF THE INDIA
CEMENTS LIMITED
Type of Units
Installed
Capacity as on
31.03.2005
per cent to
total
Capacity
Cement
Production
per cent to
total
Capacity
Large Plants
(Numbers 129) 153.59 93 127.57 96
White and Mini
Cement Plants
(around 365)
11.10 7 6.00 4
Total: 164.69 100 133.57 100
Source: www.indiacements.co.in
97
3.6.11 Process Capacity (Large Plants) of the India Cements Limited
TABLE 3.12
PROCESS CAPACITY (LARGE PLANTS) OF THE INDIA CEMENTS
LIMITED
Process Capacity (TPD) per cent to
Total
Number of
Kilns
Average Kiln
Capacity (TPD)
Dry 362,868 96 126 2880
Semi-Dry 4,170 1 8 521
Wet 12,320 3 29 425
Total: 3,79,358 100 163 2327
Source: www.indiacements.co.in
3.6.12 Process Wise Cement Production (Large Plants) of the India Cements
Limited
TABLE 3.13
PROCESS WISE CEMENT PRODUCTION (LARGE PLANTS) OF THE
INDIA CEMENTS LIMITED
Process Production (million tonnes) per cent to Total
Dry 122.83 96.3
Semi-Dry 1.53 1.2
Wet 0.19 0.1
Others 3.02 2.4
Total 127.57 100
Source: www.indiacements.co.in
98
3.6.13 Installed Capacity - Regionwise/Statewise in the India Cements Limited TABLE 3.14
INSTALLED CAPACITY - REGIONWISE/STATEWISE IN THE INDIA CEMENTS LIMITED
Region/State Number of Plants Installed Capacity
Northern Region
Punjab 3 3.91
Delhi 1 0.50
Haryana 1 0.17
Himachal Pradesh 3 4.06
Jammu and Kashmir 1 0.20
Rajasthan 14 18.52
Total North 23 27.36
Eastern Region
Bihar 1 1.00
Orissa 3 3.04
West Bengal 4 3.13
Assam 1 0.20
Chattisgargh 9 10.67
Jharkhand 5 4.58
Meghalaya 1 0.20
Total East 24 22.82
Southern Region
Tamil Nadu 13 14.56
Andhra Pradesh 22 22.79
Karnataka 8 10.09
Kerala 2 0.62
Total South 45 48.06
Western Region
Maharashtra 8 11.78
Gujarat 10 17.14
Total West 18 28.92
Central Region
Uttar Pradesh 8 6.76
Madhya Pradesh 10 17.44
Total Central 18 24.20
Grand Total 128 151.36
Source: www.indiacements.com
99
FIGURE 3.1
LOCATION OF THE INDIA CEMENTS LIMITED IN INDIA
100
3.7 TYPES OF CEMENT PRODUCED
3.7.1 Coromandel King-Sankar Sakthi- Raasi Gold 53 Grade Cement
Coromandel King, Sankar Sakthi and Raasi Gold are high strength cements
to meet the needs of the consumer for high strength concrete. The minimum 28
days compressive strength of 53 Grade OPC should not be less than 53 million
tonnes per annum. For certain specialised works such as prestressed concrete and
certain items of precast concrete requiring consistently high strength concrete, the
use of 53 Grade OPC is found very useful. 53 Grade OPC produces higher-Grade
concrete at very economical cement content. In concrete mix design, for concrete
M-20 and above Grades a saving of 8 to 10 per cent of cement may be achieved
with the use of above mentioned 53 Grade OPC.
3.7.2 Coromandel-Sankar-Raasi 43 Grade Cement
Coromandel, Sankar and Raasi are the 43 grade OPCs most popular
general-purpose cement in the market today. The production of 43 grade OPC is
nearly 50 per cent of the total production of cement in the country.
3.7.3 Blended Cement
Coromandel Super Power, Sankar Super Power and Raasi Super Power are
the premium blended cements from The India Cements Limited. It is produced by
intergrading of OPC clinker along with gypsum and mineral admixtures. Dedicated
101
to the end user after passing through stringent tests at their research and
development laboratory, it ensures durable structures that lasts for generations.
3.7.4 Sulphate Resisting Portland Cement (SRC)
Sankar SRC can be used for structural concrete wherever OPC or PPC or
Slag Cement is usable under normal conditions. Sankar SRC is particularly
beneficial in such conditions where the concrete is exposed to the risk of
deterioration due to sulphate attack. For example, in contact with soils and ground
waters containing excessive amounts of sulphates as well as for concrete in
seawater or exposed directly to seacoast.
102
3.8 FINANCIAL PERFORMANCE WITH RESPECT TO
OPERATIONAL PERFORMANCE OF THE INDIA CEMENTS
LIMITED
TABLE 3.15
HIGHLIGHTS OF FINANCIAL PERFORMANCE OF THE INDIA
CEMENTS LIMITED ` in Crore
2010-11 2009-10
Net Sales/Income from operations 3417.07 3687.27
Other Income 123.26 120.99
Total Income 3540.33 3808.26
Total Expenditure 3067.03 2944.75
Operating Profit 473.30 863.51
Operating Margin per cent 13.37
per cent
22.67
per cent
Interest and Finance Charges 141.72 142.64
Gross Profit after Interest but before Depreciation and Tax 331.58 720.87
Depreciation 244.03 233.12
Profit for the year 87.55 487.75
Foreign Exchange Fluctuation 2.32 43.57
Profit before Tax 89.87 531.32
Deferred Tax Liability 5.00 13.66
Taxation provision - net 16.77 163.32
Profit after Tax 68.10 354.34
Return on Capital Employed (ROCE)* 8.96 per
cent
16.52
per cent
* ROCE = Operating Profit/Capital Employed (excluding capital work in progress
and revaluation) Source:www.indiacements.co.in
Sales and other income from operations has reduced by 7.03 per cent
primarily due to reduction in the volume of cement by 5 per cent and absence of
clinker sales as detailed elsewhere. The other income was marginally higher due
103
to inclusion of profit on sale of investments primarily that of Bharathi Cement
Corporation Limited. The total expenditure has gone up by 4 per cent on account
of increase in the cost push as detailed in the directors’ report. Interest and other
charges were marginally lower at `141.72 crore (`142.64 crore) while the
depreciation charges were higher at `244.03 crore (`233.12 crore) due to higher
capitalization including the upgradation facilities at Chilamakur. The deferred
taxation provision as has resulted in a liability of `5 crore (`13.66 crore) while the
provision for current tax works out to `16.77 crore (`163.32 crore). The resultant
net profit after tax was at `68.10 crore as compared to `354.34 crore in the
previous year.
3.9 MILESTONES OF THE INDIA CEMENTS LIMITED
1946 Incorporation of The India Cements Limited.
1949 Commissioning of first cement plant at Sankarnagar-Installed capacity1 lakh
tonnes per annum.
1963 Commissioning of second cement plant at Sankaridrug-Installed capacity
2 lakh tonnes per annum.
1969 Capacity expansion at Sankarnagar touches 9 lakh tonnes per annum.
1969 Awarded Merit Certification for Outstanding Export Performance (1968-
1969).
104
1971 Capacity Expansion at Sankari Durg to 6.00 lakh tonnes per annum.
1990 Acquisition of Coromandel Cement plant at Cuddapah-Installed Capacity
rises to 2.6 million tonnes per annum. The India Cements Limited. becomes the
largest producer of Cement in South India
1990 Conversion of Sankarnagar Plant to Dry Process with the increased capacity
of 1.00 million tonnes per annum.
1991 India Cements ventures into Shipping. Sets up a Shipping Division.
1994 ISO 9002 Certification for Sankarnagar plant
1994 Floats successfully 50 million US dollar GDR issue.
1995 Announces issue of 1:1 Bonus shares.
1996 India Cement’s green field cement plant at Dalavoi commences commercial
production. Installed capacity 0.9 million tonnes per annum
1997 India Cements acquires Aruna Sugars Finance Limited. renamed as India
Cements Capital and Finance Limited
1997 India Cements acquires Cement Plant of Visaka Cement Industry Limited at
Tandur, Ranga Reddy District of Andhra Pradesh. Installed capacity 0.9 Million
Tonnes.
105
1998 India Cements acquires Cement Corporation of India's Yerraguntla Cement
Plant at Andhra Pradesh. Installed capacity 0.4 Million Tonnes.
1998 India cements acquires Raasi Cement Limited at Nalgonda District of
Andhra Pradesh installed capacity 1.8 million tonnes.
1999 India Cements acquires Cement Plant of Shri Vishnu Cement Limited at
Nalgonda District of Andhra Pradesh. Installed capacity 1.0 Million Tonnes.
1999 Turnover sails over the `1000 crore mark.
2001 India Cements divests its stake in Sri Vishnu Cement Limited.
2001 Group's overall capacity reaches 9 million tonnes.
2004 The Unique Waste Heat Recovery System for generation of power from
waste gas at Vishnupuram Cement Plant was commissioned during November
2004, for a capacity of 7.7 MW of power.
2004 The company through its Special Purpose vehicle M/s Coromandel Electric
Company Limited has commissioned a (gas based) captive power plant at
Ramanathapuram for a capacity of 17.4 MW and the same has started supplying
power from the month of November 2004.
2005 The Company has successfully completed an equity issue in the
international market during October 2005 by issuing 25,613,796 Global
Depositary Shares (GDSs) at 4.3226 US dollar per GDS, (each GDS representing
106
2 underlying equity shares of ` 10 each) and raised an amount of ` 497 crore
including a premium of ` 446 crore
2006 The Company has issued unsecured Zero Coupon Convertible Bonds due
2011 (FCCBs) for 75 million US dollar to investors outside India at an initial
conversion price of `305.57 per share.
2007 The Hon'ble High Court of Judicature at Madras vide its order dated
25th
July 2007 sanctioned the Scheme of amalgamation of Visaka Cement
Industry Limited with The India Cements Limited.
2007 The Company has converted the Sankari plant from wet process to dry
process and commissioned the plant.
2007 The Company has privately placed 2,07,89,000 equity shares at a price of
`285 per share (including premium of `275 per share) by way of Qualified
Institutional Placement in December 2007.
2008 The Company has revived its shipping business with the purchase of two
ships (dry bulk carriers) with a total capacity of 79843 DWT.
2008 The Company has successfully bid for the Chennai franchise of the DLF-
IPL 20/20 Cricket Tournament - "Chennai Super Kings".
2008 The Company has completed and commenced commercial production of one
million tonne grinding plant at Chennai
107
2009 The Company has completed and commenced commercial production of one
million tonne grinding plant at Parli (Maharashtra).
2009 The Company's subsidiary, namely, Trishul Concrete Produts Limited has
completed and commenced commercial production of one lakh Cu.M ready mix
concrete Plant at Hyderabad (Andhra Pradesh).
2009 The II line of 1.2 Million Tonnes at Malkapur was commenced operations
from March 2009.
2009 The upgraded capacity of kiln I to 3000 tonne per day (1700 tonne per day)
at Vishnupuram started functioning from April 2009.
2010 India Cements Limited Financial Service Limited (ICLFSL), the Company’s
wholly owned subsidiary, acquired 6.89 per cent (including shares acquried under
open offer) of equity share capital of Indo Zine Limited (IZL). Consequently, IZL
became a subsidiary of ICLFSL and ultimate subsidiary of the Company in
January.
2010 The Corporate office of the company was shifted in February, 2010 to its
own building “Coromandel Tower” at 93, Santhome High Road, Karpagam
Avenue, MRC Nagar, Chennai 600 028. The Company privately placed in March,
2010, 2,45,94,000 equity shares at a price of `120.20 per share (including
premium of `110.20 per share) to Qualified Institution Buyers. The Company’s
cricket franchise “Chennai Super Kings” has own IPL III Trophy in April 2010.