JK Cement has over four decades of experience in cement manufacturing. We have integrated cement manufacturing plants and split grinding units, which are strategically located near our limestone mines and are well connected to the end-markets by road and rail networks.
From modest beginnings in the year 1974 with a capacity of 0.3 million tonnes at Nimbahera in Rajasthan, today the Company has an installed grey cement capacity of 14 million tonnes, with plants located at Rajasthan, Karnataka, Haryana and UP. JK White Cement is the second largest manufacturer of white cement in India, with an annual capacity of 6, 18,000 tonnes and the company is also the leading producer of wall putty in the country. JK White Cement's plants are accredited with ISO - 9001 and 14001 Certified Company by LRQA. Further, the plant is also OHSAS 18001 (For safety and environmental upkeep) accredited. Having established a strong presence in India, the Company made its first international foray with the setting up of a green-field dual process White Cement-cum-Grey Cement plant in the free trade zone at Fujairah, U.A.E to cater to the GCC and African markets.
With a total grey cement capacity of 14 million tonnes, white cement capacity of 1.2 million tonnes (including capacity of Fujairah 0.6 MnTPA) and wall putty capacity of 9,00,000 tonnes, our plants steer us towards our core vision to be the preferred manufacturer of cement & cement-based products and partnering Indias growth story.
We manufacture grey cement in three facilities located at Gotan, Nimbahera and Mangrol in the state of Rajasthan in Northern India We also have one grey cement facility at jharli, Dist:Jhajjar, Haryana and one in Muddapur, Dist: Bagalkot, Karnataka. Our plants have obtained many accolades and recognition, the most noteworthy being IMS Comprising of : ISO-9001:2008 for QMS and ISO-14001:2004 for EMS for the grey cement facility at Nimbahera and Mangrol.
Commenced commercial production in 1975 with an initial capacity of 0.3 MnTPA. In the year 1979, a second production line was added to enhance the production capacity to 0.72 MnTPA. 1982 witnessed the incorporation of another production line taking the production capacity to 1.14 MnTPA. In 1988 a pre-calciner was installed and the production capacity touched 1.54 MnTPA. Constant modernization and up-gradation was instrumental in bringing the plant to its present capacity of 3.25 MnTPA.
Commenced commercial production in Dec'2001 with a capacity of 0.75 MnTPA. It is situated close to Nimbahera plant (10kms away) - offers it significant synergy benefits like assistance from technical & commercial staff of Nimbahera Complex.
We successfully implemented a brown field expansion at Mangrol having a capacity of 3 MnTPA, integrated plant with 1.5 MnTPA cement grinding capacity, 25 MW Captive power plant and 10 MW Waste Heat Recovery plant.
It is situated near Muddapur village of taluka - Mudhol, District - Bagalkot (Karnataka) and has the latest state of art technology to manufacture 3.0 Million tonnes of cement per annum. The commercial production at Muddapur started in September, 2009 and the despatch commenced in October, 2009. The plant has the latest and the most modern dry process pre-calcination technology with sophisticated state of the art technology and control system from Internationally renowned firms like FL Smidth, Tahio Engineering Corporation, Japan and others for manufacturing cement with robotic technology and to ensure top quality cement consistently. The best equipments available in the global market have found their way into the plant making it the most modern plant. The plant has a 6500 TPD kiln. The cement production capacity of the plant is upto 3.0 Milliontons per annum based on the quantum of OPC, PPC and Slag Cement.
The Company has put up a split grinding unit of 1.5 MnTPA at Jharli, Dist., Jhajjar, Haryana with an investment of Rs 400 Crore. Modern machinery is being sourced from renowned cement machinery manufacturer M/s Thyssen Krupp.
The plant will source its raw material from both internal and external sources such as fly ash from NTPC power plant and clinker for grinding from Nimbahera and Mangrol. This site is very well connected by rail & road and the necessary infrastructure is available for operation of this plant.
We were the first White Cement facility in India, which was limestone based, and manufactured Cement through the dry process. The White Cement plant was commissioned in 1984 at Gotan, Rajasthan, with an initial production capacity of 50,000 tons. The White Cement plant uses technical expertise from F.L. Smidth & Co. from Denmark and state of the art technology with continuous on-line quality control by micro processors and X-rays ensure that only the purest White Cement is produced. Over the years, continuous process improvements & modifications have increased the plant's production capacity to 600,000 tonnes per annum.
The Company cemented stronger footprints on its roadmap to success with the commissioning of new greenfield split cement grinding unit at Aligarh, UP with a capacity of 1.5 MnTPA. Commercial production and first dispatch from the unit commenced in February 2020.
With the commissioning of a Grey Cement grinding unit in Balasinor, JK Cement has strengthened its foundations in the state of Gujarat. The new plant is spread over a total area of over 8 hectares and has a capacity pf 0.7 MnTPA. This will enable the Company to further strengthen its presence in Indias high growth markets, generate employment opportunities for the locals and help serve the customers better.
KIL Cement Division is an award-winning cement manufacturer and is one of the nation's largest producers to provide high quality products and reliable services to our clients and communities throughout India. Discover our manufacturing footprint, products, innovation methods, portfolio and our philosophies along the way.
Founded in 1969, Birla Shakti is one of the global leaders in cement technology. Besides being a leading supplier of cement and aggregates, we also offer consulting, research, trading, engineering and other services to complement our customers business needs. Our headquarters is in India and we have production sites in several parts of the country.
Under the cement division of Kesoram Industries Limited, Birla Shakti manufactures and sells cement. We are widely recognised for our quality, strength and technology, which has enabled us to build strong working relationships and gain the trust of our customers and builders. As a mark of our quality management best practices, we have been certified an ISO 9001 company.
Birla Shakti has two cement manufacturing plants located at Sedam, Karnataka (the "Vasavadatta Cement Plant") and Basantnagar, Andhra Pradesh (the "Kesoram Cement Plant"). Our cement business has been in operation for over 40 years, catering to the regional demands predoimnently in Karnataka, Andhra Pradesh and Maharashtra. Our plants are strategically located near our leased limestone deposits in the states of Karnataka and Andhra Pradesh. Presently, we have a combined total installed capacity of 7.25 million MT.
Create long-term value for our stakeholders through passionate commitment to excellence, by being customer focused, bringing total employee involvement, disciplined and innovative management process to drive sustained competitive advantage
Each of our milestones reflected in the timeline is a reflection of our passion, dedication and persistence in Total Productivity Maintenance (TPM). And in this short period of time, we at Kesoram Cement and Vasavadatta Cement have grown from strength to strength emerging as leaders of the cement industry.
Cement is a binder thats used to produce concrete. There are various types of cement for use in different applications. The properties of cement can also be varied through additives. Find out more about how we make our cement.
We are constantly finding innovative ways to improve our cement production process to better deliver solutions and products. The reason is simple: we believe in creating value and addressing our clients needs in todays ever-changing business climate. Our goal is to be the industry leader in innovation and technology, and contribute to building livable urban landscapes.
Special emphasis is placed on Research & Development facilities to reduce thermal, electrical energy and overall CO2 emissions. Each division of Birla Shakti has a well-equipped, advanced R&D department to pursue product and process improvements related to that division, as well as monitor thermal and electrical energy efficiency. Each R&D department is staffed with around 20 highly qualified researchers.
Infrastructure, growth, discipline and integrity our business is built on these very essentials. As an ISO 9001, 14001, 18001 and 50001 company, we take care of the land and the community through the entire cycle of cement manufacturing use from mining to clinkerisation.
One of the main reasons for our tremendous success in the Indian market has been our reach across the nine highly industrialised states of Andhra Pradesh, Maharastra, Karnataka, Goa, Kerela, Madhya Pradesh, Telangana, Chattisgarh and Tamil Nadu.
Our dealer network in the trade segment comprises 2,000+ strong and loyal dealers across the territories. Most of these dealers have been associated with us for the last 35 years. This strong bond empowers us with the confidence and ability to grow further in this segment.
The key to sustaining economic growth lies in our belief, where we value our employees and their families, the environment we do business in, our esteemed customers, as well as the local communities we are surrounded by. We are convinced that social progress should be shared and enjoyed by all that KIL Cement Division is connected to. Learn more about how we are making this a reality.
At Birla Shakti, we are constantly exploring new technologies and initiatives to conserve the environment we work and live in. Being a responsible managed firm, we aspire to exceed market expectations across all sustainability issues and go beyond legal compliance to proactively reduce our environmental impacts.
Our plant generates both hazardous and non-hazardous waste during the manufacturing of cement. Major waste include used oil, used battery, MS scrap, PP burst bags, alumina fire brick, overburden in mine, etc.
However, we make constant efforts to recycle and reuse the waste generated out of our own operations and waste generated by other industries like pharma. Only waste that cannot be utilised effectively is being disposed off.
In managing our waste output, we are also utilising waste generated in other industries as alternative fuel for our manufacturing plants. We have a tie-up with the government of Goa to procure waste which will be used as alternate fuel input.
Concurrently, we are the first in India to install Hot Disc technology to help utilise and manage waste. Presently, we recycle and reuse Plastic waste, Carbon black powder, PU and upper cutting waste, shredded tyres /rubber chips, Municipal solid waste.
Co-processing in cement kiln perforce provides high temperature and long residence condition during the operation and is an effective technology for the management of hazardous waste in an environmentally friendly and safe manner.
It fully absorbs the energy and material value of the waste without any harmful emissions. Co-processing in cement kiln ranks higher in the waste management hierarchy as compared to other disposal options such as incineration and landfill.
Unlike incineration and landfill, co- processing does not leave behind any residue that might have harmful impact on the environment. Thus, co-processing is an ecologically sustainable solution for waste management.
Fresh water is a scarce resource and its alarming depletion in Gulbarga and Basant Naagr has led to our increased focus on effective water management through conservation, reduction in leakage or wastage and recycling & reuse.
We strive to spread awareness on conserving water in our operations and families of employees, by implementing a number of water harvesting and recycling and reuse projects, so as to minimise the consumption of fresh water.
Furthermore, the sump developed in the mine pit is utilised for storage of rain water for later use in the process during lean period. The amount of rainwater collected depends on the rainfall, as well as the catchment area, where the water will be diverted to the mine pit (Sump).
For this purpose, garland drains are cut around the quarry on the higher profile of the land to channel rainwater from the catchment area. This water is then directed to the mine pit by opening the drain at desirable places. The mine sump has been developed to a capacity of 40,00,000 m3.
We meet almost all our water requirements from ground water sources. However, we have also implemented initiatives for replenishing ground water through our water harvesting structures built at various locations within the plant premises, as well as in the vicinity of the manufacturing facilities.
To create a sustainable environment for our business and the community, we have designated a green belt development site at our plants for afforestation. So far, a total of 14,91,807 samplings have been planted and harvested.
Currently, the total area for afforestation at our plants is 860 acres within the plant, mine and colony premises. Our efforts in driving environmental conservation projects such as this reinforce our philosophy of sustainable development and caring for the community.
Underpinning life at Company is the Division Vision our statement of the company culture, which both informs and describes our behaviour. Development activities revolve around the under-privileged community that lives in the immediate vicinity of our cement plants.
The range of our activities begins with extending educational and medical facilities and goes on to cover vocational guidance and supporting employment-oriented and income-generation projects like agriculture, animal husbandry, cottage industries by developing local skills, using local raw materials and helping create marketing outlets. These are the key areas that we endeavour to make a difference in.
Each factory has a medical centre with full-fledged doctors and the latest basic equipment. Mobile medical services are provided in the vicinity and regular medical camps are held to eradicate diseases, offer medical help, treatment and preventive care.
We foster learning and knowledge through formal schools. Education is imparted not only to children of employees but also to children from rural areas, who do not have access to any medium of information or education.
Our schools maintain high standards and are open to other children of the vicinity. These schools are often the preferred centres of learning in the district and adjoining areas. Our goal is to give everyone a chance at having an education.
We are encouraging the development of human capital by expanding human capabilities through skills development and vocational training, as well as by promoting excellence in indentified cultural fields. To achieve our objective, there is a dedicated training and development team that operates solely on such development intiatives.
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Kesoram Industries Limited (Cement Division) offers employment opportunities in a wide range of functions. The recruitment process is fair and transparent, with adequate opportunities for suitable candidates both internally and from outside.
Recruitment is a continuous process in KIL Cement Division. We regularly hold interviews in principal cities of south and west India. In other cases, applicants are invited for specific vacancies announced through advertisements in leading newspapers or announced in this website.
Birla Shakti Cement, Division of Kesoram Industries Limited Unit: Vasavadatta Cement, Factory PO: Sedam Dist: Gulbarga Karnataka - 585222 Tel No.: +918441-276005/277403 Fax : +918441-276139 Email : [email protected] Birla Shakti Cement, Division of Kesoram Industries Limited Unit: Kesoram Cement, Factory PO: Basantnagar Dist: Peddapalli Telengana - 505187 Tel No.: +918728-228152/228252/228121/228129 Fax : +918728-228160/228444 Email : [email protected] SOLAPUR PACKING PLANT Plot No T3-MIDC Chincholi Industrial Area Taluka - Mohal Dist: Solapur Maharashtra - 413255
Plot No T3-MIDC Chincholi Industrial Area Taluka - Mohal Dist: Solapur Maharashtra - 413255
Cement Division Unit of Kesoram Industries Limited 44/A, Ground Floor, Bharath Apartments, Fair Field Layout, Race Course Road, Bangalore - 560001, Karnataka
Cement industry is a part of the core industrial sector and plays a crucial role in building up of the nation's economy. Cement is a key ingredient of construction sector and is one of the indicators of development in a country. Setting up a cement plant is both time and capital intensive; it could take anywhere between five to seven years from concept to commissioning and an investment of around to Rs 1,800-2,000 crore for a typical integrated plant of 3 million tpa cement capacity. Size of a cement plant could vary from 0.2 million tpa to 5.0 million tpa.
Before starting to build a cement plant, it is imperative to know what the cement making process involves. The cement manufacturing process starts with mining of limestone followed by grinding it with other raw materials like clay, shale, bauxite, iron ore, etc. to prepare a raw meal, which is heated at a sintering temperature of 1,400 to 1,500 degree Celsius in a kiln to manufacture clinker. The clinker is then finely ground along with additives like gypsum, fly ash, slag, etc. to produce the desired type and quality of cement. Cement is then stored in silos from where it is dispatched to the market in 50 kg bags and/or in bulk.
The following sections explain in detail each of these stages: Initiation & conception stage First step is to decide the kind of plant to be set up for manufacturing cement. There are four major types of plants (units) that can be set up:
The next major step is to identify the location for setting up the cement plant. A plant location is an irrevocable strategic decision. Parameters for determining the location principally depend on the type of plant envisioned to be set up. Salient parameters in context being:
At the end of this stage, a broad concept of the project should be in place in terms of plant location(s), capacity and investment requirement. This phase can span anywhere between 0.5 to 2 years depending upon when the board gives its approval to go ahead to the next phase.
Pre-project stage Initiation/conception stage lays the foundation for the next important milestone of setting out the action plan for the "pre-project activities". The pre-project stage is the preparatory stage where the concept and configuration of the proposed cement plant needs to be transformed to a relatively structured form from the initial broad concept.
The major milestones of pre-project stage are: Securing limestone: Limestone is the key ingredient in cement manufacturing and thus, it is very critical to secure limestone before going ahead with setting up of a cement factory.
Regulatory and statutory clearances: Many regulatory and statutory clearances are required for setting up of a plant and starting operations, the few major ones out of many such required clearances/permissions are:
Financial closure: Ideally the company should arrange for the funds before starting the project. Although some large business houses begin the project by first putting in a portion of the equity and then parallelly commencing the process of arranging for other types of finances.
Detailed techno-economic feasibility report is usually submitted to the financial institutions for obtaining loan. The project is appraised by financial institutions based on their own paraments to validate the results highlighted in the TEFR. Once the institution is satisfied with feasibility, loan is sanctioned for the project. The institution can either grant the loan on its own or form a consortium of financial institutions that together finance the loan.
The aforementioned activities play an important role in determining the overall success of the proposed cement project. Pre-project activities can span across 1 to 2 years dependent primarily on the time taken on securing limestone mines and getting financial closure.
Project execution stage Project execution is a crucial stage and needs to be carefully planned to avoid cost and time overrun. Mostly companies set up a multi-functional team of technical professionals for project execution. Liaison, finance and administration functions are also important to ensure that land acquisition, clearances and funds availability do not create a bottleneck in project execution, as many of these activities from pre-project stage continue well into the project execution stage. Project execution has two main components ' planning and monitoring, and implementation.
Project planning and monitoring: Establishment of an efficient system for project planning and monitoring, including exporting procedures for progress review and coordination, is very vital for successful project execution. This can either be done by an in-house team or can be outsourced to a project management consultant.
Many companies engage a technical consultant for some or all stages of project management/construction monitoring to ensure a smooth execution process. Key factors in setting up of a cement plant Some of the important factors which need to be kept in mind during setting up a cement plant are:
Holtec Consulting is an advisory firm, primarily positioned to service the entire gamut of consulting needs of the global cement industry. Its portfolio spans services in all disciplines of engineering, business consulting, geology and mining, project and construction management, environment management, performance enhancement, etc.
Bhubaneswar, Sep 12 (PTI) Emami Cement Limited today announced plans to raise its total production capacity to 6 MTPA as its 2 MTPA plant being set up at a cost of Rs 600 crore in Odishas Jajpur district is likely to be commissioned by March, 2018.Also Read - TMC Minister Cycles 38 km to State Assembly as Petrol Price Crosses Rs 100 in Kolkata
Similarly, Emami Double Bull Cement, manufactured by the company targets to take up its market share to 10 per cent in all the regions of its operations by March 2019, Vivek Chawla, CEO of Emami Cement Limited told reporters here. Also Read - Lockdown Measures Must Be Taken In Districts With Positivity Rate Above 10%: Centre Issues Fresh Guidelines To States
Presently, Emami Cement is producing 60 per cent of the current total cement capacity of 4 MTPA through the mother clinker plant in Chhattisgarh and the grinding unit at Panagarh in West Bengal, Chawla said.
By March 2018, these two units target to achieve the operational production capacity of 3.2 MTPA. Around the same time, the company would also be ready with its new grinding unit of another 2 MTPA in Jajpur, he said.
Describing quality and trust as the two main pillars in the growth of a cement brand, he said Emami Cement which is committed to offer quality products to the end consumer, has adopted various strategic business investments for its Emami Double Bull Cement Brand.
The company has installed a hi-end automated robotic laboratory at the Risda plant in Chattisgarh for monitoring a consistent product quality. Emami Cements Chhattisgarh plant is the second one to have this technology in India and the first in Eastern India, Chawla said.
The Company has mobile testing vans for consumers to actually test quality of the product directly and make an informed choice. Each van is equipped with comprehensive testing machine for cube casting and offer various on-site tests for customers, he said.
Chawla said the entire sales in our existing markets of Chhattisgarh, West Bengal, Jharkhand, Bihar, Odisha, Eastern Madhya Pradesh and Vidarbha regions is close to around 1.5 to 2 lakh tonne per month.
If youre thinking about set up a cement factory (or cement plant), you must weigh the pros and cons of it many times. There is no doubt that youve considered all your musts, such as locations, cement plant design, cement plant layout, etc. But the most important thing is absolutely cement factory cost how much does it cost to build a cement factory? Maybe you also want to know the potential investment you dont see coming.
According to the data we know, the total cost of a cement plant is estimated to be US$ 75 to US$ 100 per ton. One thing to be clear, this is just an estimation, in the real cement plant building, the cement factory cost is affected by various factors, including the significant difference in cost of land, availability of limestone mines, etc.
The cement factory cost is based on changing factors like size, location, labor, raw materials, and current real estate trends, which make it impossible to nail down a perfectly accurate, one-size-fits-all answer. So lets list the cost item needed in building a cement factory, everyone can get your own plant according to these items.
As we all know, the cement production line is made up of various types of cement equipment, the cement factory cost depends on the cement factory machine you choose. For some buyer who has abundant funds, might choose high-quality equipment, which increases the cost of the cement production line. At the same time, high-quality cement plant also brings considerable economic benefits and market returns.
At present, the new-type cement plant has advantages of high profit, quick effect, high efficiency, energy saving, environmental protection, easy operation, and low cost. The hot-sale cement plant is composed of following cement factory machines:
If you are ready to buy a cement plant, it is suggested to choose a cement plant manufacturer with a large scale and strong strength, which will provide full cement equipment and service, also ensure the quality and performance. In general, for the customer who wants to buy the whole cement production line, the cement plant manufacturer will give more preferential policies. On the contrary, the strength of small-scale manufacturers is limited, cement equipment types are not complete enough, need to buy from different manufacturers, not only trouble but also increase the cost of investment.
Investors have different requirements for the daily output of the cement factory, so we can find a large capacity cement plant and mini cement plant in the real case, and the investment capital will also be different. Generally, the higher the output value, the higher the investment, because the model requirements for cement equipment will be higher, and the price of equipment will naturally rise, but the value of the benefits to customers will be greater.
Enterprise competition is a side factor that affects the cement plant price. The more intense the competition, the cheaper and more affordable cement equipment prices. On the contrary, if there are fewer cement plant manufacturers and the competitiveness is weak, there is no obvious threat between the companies. Cement plant prices will generally maintain a normal state or relatively increase, which is a manifestation of natural laws.
Except for above elements, there are some other factors involved in the cement factory cost, such as labors, raw materials cost, cement plant design and so on, labors cost is always related to the location and your scale of cement factory; as for the cost of the raw materials, the place where is near mineral resource will be recommended, which will reduce your transportation cost. For most large cement plant manufacturers, they can provide custom solutions to cement plants, also supply the EPC project for equipment or cement plant.
8. Capital Cost & Return It takes around US$ 120-140 per tonne to set up a cement plant. This has risen from around US$ 100 per tonne 3-4 years back. Given the rising cost of land and its unavailability, rising costs of equipment and engineering services, this capital cost to set up cement capacity is only going to rise. This will most likely fuel a greater drive to acquire existing units by bigger players. Table 1: Capital Cost to Set Up 1 MTPA Cement CapacitySource: Avendus Research What is more, given the rising cost of setting up a greenfield cement capacity, the operating profitability or EBITDA (earnings before interest, tax, depreciation and amortization) is likely to remain under pressure, thereby again deterring new capacities to come on stream.
Break-even EBIDTA, for instance, for a 1 MTPA (million tonne per annum) capacity, operating at 80% utilization, and assuming a 70:30 debt to equity ratio, works out to around US$ 21 per tonne. In other words, this is the minimum a new cement capacity must earn in order to provide for depreciation and interest costs. Table 2: Break-Even EBITDA for 1 MTPA Capacity Pan India players the most profitable ones, given their brand strength and economies of scale currently earn around US$ 13-16 EBITDA per tonne. And given that ROCE for new plants is less than 10% or US$ 14 per tonne setting up new capacities are not profitable anymore, until cement demand and prices were to head northwards.
Thus, higher cement demand plus greater consolidation is the only way for existing cement companies to earn higher profitability going forward, which seems likely at this point of time. Of, lower cost of raw materials can also boost margins, but there is a lesser likelihood of this happening, plus this is something that is not under control of cement companies.
9. Indias Leading Cement Companies Indias top six cement companies control almost 50% of the domestic capacity, production, and market. Leading the pack are Ultratech Cement (55+ MTPA capacity), ACC (30+) and Ambuja Cement (28+). ACC and Ambuja are now owned by Swiss-based Holcim, which owns over 50% stake in each of these companies.
Here are the key performance and valuation figures of these companies Table 3: Indian Cement Companies Key Metrics 10. Investing in Cement Stocks Cement is a cyclical industry, closely tied to the level of economic activity in the country. So this is not a business for people who get worried seeing violent ups and downs in a companys performance (like profit and return on capital) and thus stock prices.
Given such volatility in business and earnings, valuing cement stocks on a P/E (price-to-earnings) basis is not feasible. While growth in the past has been good overall, margins for the industry as a whole have been coming down owing to rising cost of raw materials, transportation, and other operating costs.
Think of EV as the theoretical takeover price. It is more comprehensive than market capitalization, which only includes equity shares. It also includes the net debt (Debt minus Cash) that a company has to assume to set up a new cement plant.
The best companies in the sector will mostly trade above this level of US$ 120-140 per tonne, given their brand name, size (economies of scale) and integrated nature of business (captive raw material sources, wide distribution etc.) Most mid and small size companies will usually trade at less than US$ 100 EV/tonne.
But, in general, the best cement companies get attractive when prices crash in a cyclical downturn to near or less than the benchmark EV/tonne of US$ 120-140. This is when you need to get into them and then be willing to ride the volatile tides over the long run.
Thank you for the wonderful analysis presented so well. I always read about valuation of cement companies on a EV/tonne basis but never really understood how to do it. Thanks to you the concept is crystal clear. Also the amount as well as quality of research done is so amazing.
Very good analysis in Lucid terms I am doing analysis for the cement industry in Southern and Eastern India , It would be really great if you could throw some light on Capital costs and considerations while setting up a grinding or bagging (packing) unit too.
This post is very insightful. I am not an expert on valuation of cement companies, but want to share a thought after reading your post. A better way to compare valuation of cement companies could be to eliminate the financial leverage. A firm like Shree cement is trading at a higher EV/MT for a reason, low debt and high ROC. To that extent, I feel using below multiple to value cement firms is more appropriate rather than believing that a high quality company should trade at $220/MT etc.
Rashtriya Ispat Nigam Ltd here (Visakhapatnam Steel Plant) is expediting one of its long-pending projects, a cement grinding unit, to make use of the slag generated by blast furnaces and flyash, according to sources.
RINLis setting up a 3-million-tonnecement grinding unit, making use of6 lakh tonnes of flyash, a millon tonnes ofslag from the blast furnaces and the rest (1.4 million tonnes)being cement clinker. A joint venture will be formedfor setting up the plant, with the RINL having 26 per centequity in it.
The site selected for the project is near Gangavaram Port, according to sources. A valuer has been appointed to apprise the land cost and the project. At present rates, this mayentail an investment of Rs 500 crore or so, including land cost. A consultant will be appointed for the project at a later stage and joint venture partners have not been identified yet.
Earlier, an expression of interest was invited by RINLfor the plant, but a fresh tender will have to be floated now. The setting up of a cement plant has become urgent in view of the capacity expansion of RINL from 3 million tonnes to 6.3 million tonnes. RINL has ambitious plans totake up further expansion to 16 million tonnes by 2020.
In this backdrop,disposal offlyash and slag becomes a major problem and like other steel majors, RINL has no choice but to set up the cement unit. Sources said the company may even considersetting up a clinker plant at a later stage. The cost may go up to Rs 1,000 -1,500 crore then, added the sources.