Monthly Report - JULY 2021 Cement Update

1 | Monthly Report July 2021 TABLE OF CONTENTS

Port Analysis ...... 03

Indian government sets up new cement council ...... 08

Ambuja Cements and ACC make Industry 4.0 investment ...... 09

Indian demand set to decline 20% in June quarter ...... 10

JK Cement expects 10 pc revenue growth this fiscal, aims to be 25-MT company in 5 years ...... 11

JSW Cement forays into ready mix concrete ...... 13

Disclaimer: The information contained in this market update is drawn from wide range of newspapers, business and trade magazines, government, company and industry association websites. While all possible care is taken to verify the correctness and authenticity of information contained in this compilation, no claim to independent authorship of articles is implied or intended. Readers are expected to make their own independent evaluation and verification of information for their use. While all information contained in this report are believed to be correct, the editors of this compilation or J.M.Baxi & Co. do not guarantee the quotes or other data

2 | Monthly Report July 2021 PORT ANALYSIS

Cement Traffic At Indian Ports

(Qty in Metrics Tonnes)

3 | Monthly Report July 2021 CEMENT TRAFFIC AT INDIAN PORTS QTY IN METRIC TONNES

Port Name Apr - May 21 Apr- May 20 Variance Y-o-Y BEDI 52602 0 52602 CHENNAI 2200 0 2200 COCHIN 224663 133411 91252 DHARAMTAR 127182 57400 69782 GOPALPUR 25000 0 25000 HALDIA 110579 -110579 JNPT 160129 38053 122076 KAKINADA 3150 156562 -153412 KRISHNAPATNAM 135800 71000 64800 MANGALORE 103271 36000 67271 MUMBAI 14286 0 14286 MUNDRA 43300 0 43300 PARADIP 61050 0 61050 PIPAVAV 410000 180246 229754 PORBANDAR 14650 2600 12050 PORT BLAIR 13000 0 13000 Grand Total 1390283 785851 604432

4 | Monthly Report July 2021 CEMENT IMPORTS - JUNE 2021 QTY IN METRIC TONNES IMPORTERS COASTAL IRAN SRI LANKA

AMBUJA CEMENT LTD. 43983

ORISSA TRADE MINERAL PVT. LTD. 70000

PENNA CEMENT INDUS. LTD. 50000

SANGHI CEMENTS LTD. 5913

SINGHA CEMENTS PVT. LTD. 20428

ULTRATECH CEMENT LTD. 15517

ULTRATECH CEMENT LTD. 190915

CEMENT EXPORTS - JUNE 2021 QTY IN METRIC TONNES

EXPORTES COASTAL SRI LANKA

PENNA CEMENT INDUS. LTD. 25000 28700

ULTRATECH CEMENT LTD. 58719 107300

Grand Total 83719 136000

5 | Monthly Report July 2021 Market Outlook and Trends

Cement Raw Material (CRM) includes Limestone, Gypsum, Clinker

NOTE: Above Statistics is drawn from data received from Port and Custom Authorities, while all information is believed to be correct, the editors of this compilation or JM Baxi do not guarantee the authenticity of data.

6 | Monthly Report July 2021 HIGHLIGHTS

• Indian government sets up new cement council • Ambuja Cements and ACC make Industry 4.0 investment • Indian demand set to decline 20% in June quarter • JK Cement expects 10 pc revenue growth this fiscal, aims to be 25-MT company in 5 years • JSW Cement forays into ready mix concrete

7 | Monthly Report July 2021 Indian government sets up new cement council

hereby establishes a Development Council for • The Indian government has set up a the Cement Industry (DCCI) and appoints the 25-member development council for the persons...to be the members of the said council, cement industry, which will suggest ways for a period of two years,” according to the order to eliminate waste, obtain maximum of the Department for Promotion of Industry and production, improve quality, reduce costs Internal Trade. The members include Dalmia and promote the standardisation of Bharat’s CMD, Puneet Dalmia, and UltraTech products, according to a press release. Cement’s MD, K C Jhanwar, with Dalmia as the chairman of the council. Other members include Shree Cement’s MD, HM Bangur; The India Other functions of the council include Cements’ Executive President, Rakesh Singh; Birla recommending measures for securing the full Corp’s CEO, Pracheta Majumdar; JK Cement’s utilisation of installed capacity, particularly of Deputy Managing Director, Madhavkrishna less efficient units, as well as promoting training, Singhania, and JSW Cement’s CEO, Nilesh and promoting or undertaking scientific and Narwekar. industrial research. “The central government Source: Cement.com

8 | Monthly Report July 2021 Ambuja Cements and ACC make Industry 4.0 investment

Cements Ltd, commented: “As an industry leader • Holcim India companies, Ambuja Cements we are looking at ‘Plants of Tomorrow’ as a big Ltd and ACC Ltd, are further investing in opportunity and responsibility to place India on Industry 4.0 under the group’s ‘Plants of the map of global cement manufacturing. This Tomorrow’ programme. path-breaking project will lead to transformative outcomes not just in terms of operational The four-year programme aims to create a global and financial gains but also make cement network of over 270 integrated cement plants and manufacturing in the country environmentally grinding stations in more than 50 countries by sustainable and create a safe work environment applying automation technologies and robotics, for our colleagues across all our plants.” A “Plants artificial intelligence, predictive maintenance and of Tomorrow” certified operation promises 15-20 digital twin technologies to the entire production per cent more operational efficiency compared to processes. Neeraj Akhoury, CEO India Holcim a conventional cement plant, the company said. and managing director and CEO of Ambuja Source: Cement.com

9 | Monthly Report July 2021 Indian demand set to decline 20% in June quarter

surged, particularly after the October-December • Indian cement demand in the April-June 2020 quarter. “We expect the impact to be more 2021 quarter is expected to drop by 20 per visible in the June quarter, but the mid-single- cent as a result of localised restrictions digit price increases by the cement companies related to COVID-19 cases in the country, after the third quarter of FY20-21 will help to according to Fitch Ratings. cushion the overall impact on profit,” said Fitch Ratings in its report. As manufacturing plants Cement demand from rural housing is expected and construction sites can still operate during the to decrease by a larger extent as it is more current lockdown in most states, there is expected dependent on individual customers. Consumption to be significantly less disruption to logistics from other segments, such as urban housing, services and labour availability than under last infrastructure and commercial construction, is year’s restrictions. likely to be less affected. The input costs for Source: Cement News petcoke, imported coal and diesel have also

10 | Monthly Report July 2021 JK Cement expects 10 pc revenue growth this fiscal, aims to be 25-MT company in 5 years

scal, JK Cement had a robust performance, as • Besides, the company expects its its consolidated revenue from operations was expansion project at Panna, Madhya up 15 per cent to Rs 6,233 crore and EBITDA Pradesh, to be completed in the next (earnings before interest, tax, depreciation and financial year. amortisation) reached up to Rs 1,514 crore. Its market capitalisation had increased three times to JK Cement, part of J.K. Organisation, targets reach USD 3 billion in 2020-21. Terming it as “one up to 10 per cent growth in its revenue this of the nest” year in the history of the company in scal, helped by the government’s push for terms of performance and result, Kapur expects infrastructure, a good monsoon and pent-up this to continue in the current scal as well. When demand for the sector, said a top company oicial. asked about the growth, he said, “Last scal, we Despite a blip in sales in the April-June 2021 did close to Rs 1,500 crore (EBITDA). We will be quarter on account of pandemic-led disruptions, targeting more this year. We had good growth NSE 5.41 % is “optimistic” and expects its growth last year and we are expecting 8-10 per cent omentum to continue in 2021-22 also, recovering topline (revenue) growth this year.” “Given the quickly in the rest of nine months led by a “good vibrant economic climate that we have in our growth”, JK Cement Chief Operating Oicer (Grey country, with a lot of highway and metro projects Cement Business) Rajnish Kapur said. Besides, coming up, I am optimistic that in the coming nine the company expects its expansion project at months, we will have good growth,” he added. On Panna, Madhya Pradesh, to be completed in the April-June quarter, in which the second wave the next nancial year; after which, it would have of COVID-19 hit the country, Kapur said the start a manufacturing capacity of nearly 20 million of this scal was one of the “toughest times”. “The tonnes per annum (MTPA) from the current July-September quarter will not be too fruitful installed capacity of 14.7 MTPA. JK Cement as we have monsoon but in comparison to the envisages having a production capacity of monsoon quarters of other years, we will be in 25 MTPA in the next ve years and is open to good condition as there is a lot of demand on the take “bold decisions” for expansion including ground that needs to be satised. For third and acquisitions, Kapur said. “As a company, we are fourth quarters, we are very condent,” he said. looking to get 20 million tonnes with the new Meanwhile, he also said the possibility of a third capex (capital expenditure) expansion in Panna wave will also be considered and as a company, and planning to see how we can reach 25 million JK Cement is planning for that also. On capital tonnes in the next ve years,” he said. Work at expenditure (capex) or investment, Kapur said Panna is delayed because of the pandemic and it must make sense to the company’s long-term is now expected to be completed in 2022 After plan and did not rule out an acquisition for ] expansion at Panna, some of the existing markets the growth of the company. “Limestone reserve, will be better and new markets will come in. transfer of mines, availability of cash ow, it all “We are almost available in the north, central, matters. But, at the same time, we are certainly and west; and not only this, white cement is open to taking bold decisions and new challenges exported to other countries, too,” he added. Last for the expansion if they make sense to our long-

11 | Monthly Report July 2021 term strategy,” he said. n retail sales of cement said. “I also feel that post-COVID-19, the workforce for individual house construction, etc, Kapur said has localised now. Because of this, people are it would come back. “It might not be as much as making houses and doing construction,” Kapur we are expecting it to be but it will go up.” The added. Besides, the company has also launched a only challenge would be the money at the hand new brand logo for JK Cement, which, according of people to start construction at the individual to Kapur, reects its core values and a rich legacy level which hopefully would improve by jobs of trust. “Our logo carries the rst initial of our coming back, he said. According to him, people founder, Yadupati Singhania. The symbol ‘Y’ have now realised that life has to go normal also signies the tree of growth which has three beyond COVID-19 also. “If you look at per-capita colours. “Green signies the vision of sustainable consumption, the young population and the way growth. Grey stands for the grey business which we are becoming more of a nuclear family, I do not is the foundation of the see any reason why retail will not come back,” he Source: Economic Times Source: Cement News

12 | Monthly Report July 2021 JSW Cement forays into ready mix concrete

building materials solutions under one roof,” • “This strategic business foray would said JSW Cement. Over the next ve years, JSW augment the company’s existing building Concrete plans to expand into the souther and materials portfolio comprising cement, western region of India. “The addressable market construction chemicals and steel with for RMC in India is estimated to be approximately concrete, thus elevating JSW Cement into USD 2.4 billion and is expected to grow at a CAGR the league of a handful of companies in of 9 per cent till FY25. This growth potential is India, offering complete building materials largely driven by a government push for large solutions under one roof,” said JSW infrastructure projects and a boom in housing Cement. construction,” it said Its Chembur unit, with a capacity of 2 X 60 cubic meters per hour, will service the concrete requirements of construction JSW Cement, a part of USD 12 billion JS Group, projects in Central & South Mumbai. Over the on Monday announced its foray into ready mix next 12 months, the Company plans to establish concrete (RMC) business under the brand name three additional units in Mumbai Metropolitan ‘JSW Concrete’. It has set up its rst commercial Region (MMR) covering Navi Mumbai, Thane & RMC unit in Chembur, Mumbai and has plans Western line, it added. JSW Cement will focus to expand the business to other locations, on setting up these RMC units to cater to the JSW Cement said in a statement. “The RMC concrete requirement of big infrastructure & business foray follows the green products ethos commercial projects as well as housing projects of JSW Cement and will launch unique eco- within the catchment zones of Mumbai,” it said. friendly concrete for use in various commercial Commenting on the development, JSW Cement construction projects,” it said. The RMC business Chief Marketing Oicer C L Sethunathan said: “With foray is part of JSW Cement’s strategy to oer the brand strength of JSW Group and its pan-India the entire range of building material products to presence, JSW Concrete will enable us to oer a its customers, it said. “This strategic business credible product to our customers. Our RMC foray foray would augment the company’s existing also enables JSW Cement to oer to our clients an building materials portfolio comprising cement, integrated building material bouquet of oerings.” construction chemicals and steel with concrete, Source: Economic Times thus elevating JSW Cement into the league of a handful of companies in India, oering complete

13 | Monthly Report July 2021 Reports for July 2021

J. M. Baxi & Co. Monthly Agri Products Update

J. M. Baxi & Co. Monthly Automotive Logistics Update

J. M. Baxi & Co. Monthly Cement Update

J. M. Baxi & Co. Monthly Chemical Update

J. M. Baxi & Co. Monthly Coal Update

J. M. Baxi & Co. Monthly Container Update

J. M. Baxi & Co. Monthly Cruise Shipping Update

J. M. Baxi & Co. Monthly Edible oil and Extractions Update

J. M. Baxi & Co. Monthly Fertilizer Update

J. M. Baxi & Co. Monthly LNG & LPG Update

J. M. Baxi & Co. Monthly Mineral and Metal Update

J. M. Baxi & Co. Monthly Oil and Petroleum Update

J. M. Baxi & Co. Monthly Port Update

J. M. Baxi & Co. Monthly Project Cargo Update

J. M. Baxi & Co. Monthly Seafarers Insights Update

J. M. Baxi & Co. Monthly Steel Update

14 | Monthly Report July 2021 Research Cell:

J. M. Baxi & Co.,

Godrej Coliseum, Office No. 801, 8th floor, “C” wing, Behind Everard Nagar, Off. Somaiya Road, Sion. Mumbai - 400022 INDIA. T: 022 61077100 Ext 161/145, | M: 091-7506004224 / 7045659111 E: [email protected] | W: www.jmbaxi.com

15 | Monthly Report July 2021