Dalmia Cement (Bharat), a subsidiary of Dalmia Bharat, mitigated a seasonally weak second quarter, banking on its current stock and prior orders. The agency intends to extend its cement grinding capability to 48.5 million tonne each year (MTPA) by March 2024, and utterly shift to renewable vitality by 2030, MD and CEO Mahendra Singhi mentioned. In an interview with FE’s Rajesh Kurup, Singhi mentioned the subsequent 12 months or two could be good for the sector. Edited excerpts:
The weak Q2, coupled with excessive vitality costs, impacted Dalmia Cement…
We achieved a gross sales quantity development of 6% year-on-year, whereas gross sales income rose by 11% in Q2. Vitality costs – energy and gasoline prices – have been the most important points, however we had some stock and prior orders that helped us mitigate some impression. The outlook on prices appears to be higher and with demand additionally trying up, the trade ought to be again to pre-Covid situation by December.
What’s the standing of the $2-million plant in Bokaro?
It’s progressing as per schedule. We now have acquired the land, positioned orders for a cement mill and can quickly be beginning the development exercise. Throughout all our vegetation, we intend to achieve a cement grinding capability of 36 MTPA by March 2022 (from 33 MTPA now) and 48.5 MTPA by March 2024.
The place will the capability additions are available in from?
The Cuttack line has already been commissioned, and following the commissioning of Murli (Maharashtra) and Bokaro vegetation in two-three months, we are going to attain 36 MTPA. Over the subsequent two years, we are going to add new capability in Tamil Nadu, Bihar, Bokaro and likewise de-bottleneck our current vegetation. So, all these would result in 48.5 MTPA, and requires a capex of about Rs 9,000-10,000 crore over the subsequent three years. The capex could be raised primarily via inner accruals and debt.
Your plans to utterly shift to renewable vitality from the present use of thermal vitality by 2030.
That’s our dedication. We intend to remodel from thermal vitality and thermal electrical energy to renewable vitality by 2030. In a few years, we will probably be popping out with a particular plan as we’re ready for proper coverage interventions.
We now have already began changing fossil gasoline. We’re amassing municipal waste – industrial wastes of assorted chemical compounds, prescription drugs and different corporations – from over 25 cities and cities, and utilizing it as inexperienced gasoline.
What’s the standing of divestment of Hippostores?
It was earlier permitted by the board and we’re taking a look at finishing it quickly, earlier than the tip of the present calendar 12 months.
What’s the basic outlook for the trade? Analysts count on cement costs to rise.
From a cement demand standpoint, it ought to form up nicely. On the cement costs, we consider that to some extent the trade would be capable to go on the additional value, incurred as a consequence of excessive vitality prices, to shoppers. Within the subsequent two-three months, there might be some softening of vitality prices following selections by the Chinese language authorities and the European Fee to include gasoline prices. They’re additionally exploring the potential of containing sea freight, which had greater than doubled within the final one 12 months.
India’s present put in cement capability is at about 500 million tonne. How a lot is that this anticipated to go up?
We consider that cement corporations would add extra capability wherever they’ve limestone mines. In order that approach 4-5% addition in capability might be anticipated over the subsequent few years. The highest 4-5 corporations are additionally increasing capability. I consider roughly 30 MT of latest capability would get saved by FY23 or FY24.
Business was anticipating cement costs to rise after Diwali?
After Diwali, demand for cement within the nation is anticipated to develop by about 12%, taking into consideration the low base of final 12 months. If we disregard the low base, regular cement demand development could be 5-6%. For the cement sector, rural demand can also be vital which we count on to go up. The subsequent 12-24 months ought to be good for the cement trade.