UltraTech has got environment ministry’s nod for a Rs 2,500 crore project in Andhra Pradesh, as per an official document. UltraTech Cement is the cement producer in India with a capacity of 68 million tonne per annum.
Under the project, the company will set up an integrated cement plant at Petnikote village in Kurnool district with a clinker capacity of 4 million tonne per annum, 6 million tonne per annum of cement, 60 mega watt of captive power plant and 15 mega watt of waste heat recovery-based power unit.
The company has already acquired 431.92 hectare land for the project , which is estimated to cost Rs 2,500 crore and will generate employment for 900 persons, the document showed.
As per Mr HM Bangur, MD, Shree Cement, future demand of cement is likely to grow 1% up or down, at a similar pace with the GDP growth of 7% to 7.5%.
Monsoon will not impact the demand.
The industry is at least three years ahead and the project capacity can serve demand even after two years with 15% growth or so. There will not be any shortage of cement in the country
Cement sector is totally dependent on major economic growth
The cement price in the year will not be going up more than 3% to 4% maximum compared to last year.
Indian cement prices are low compared to world prices.
Shree Cement is running the new plant in south India at a very low capacity at present, building their brand and significant capacity will be added by the end of the year depending on the market scenario. Capacity utilisation is expected to become better.
Presently, the total capacity of Shree Cement is around 45 million tonnes and is likely to reach 50 million tonnes in next two years and the utilisation will be at 70% or so.
The company has introduced two new brands of premium brands and the response is good.
The focus of the company is to maintain the cost and improving the quality, making the brand and market price go up.
The government is planning to reduce the lease period for projects awarded under the toll-operate-transfer (TOT) model to 15-20 years from 30 years since banks are reluctant to lend for the long-term, as per a senior government official.
The government had introduced the TOT model in 2016 to monetise publicly funded highways.
Under the programme, investors make a one-time lump sum payment in return for long-term toll collection rights.
Around 75 operational national highway projects completed using public funding have been preliminarily identified for potential monetisation through the TOT model.
The government is keen to push the TOT model to free up resources and also attract private funding, which has remained subdued.
While the base value of the TOT bundle may come down owing to a reduction in the lease period, the government may get to raise more money when it goes for a re-bid after 20 years given continuing increase in traffic density on these stretches, said industry watchers.
The first round of TOT auctions for 680 km of highways ended in February 2018 and fetched the government more than Rs 9,000 crore. However, the second auction was cancelled in February this year after it drew a lukewarm response.
Electricity produced by conventional power plants in May recorded a rise of 5.1% year-on-year, on account of a surge in demand stemming from poll-related activities in the scorching summer. Conventional power plants (coal, gas, nuclear and hydro) generated 111.1 billion units (BU), and private power plants seemed to have gained the most with their utilisation levels (PLF) rising by 4.8% points to 61.1%. The overall average thermal PLF was 63.2%.
Coal India Ltd (CIL) is envisaging an 8.5% growth in production at around 660 million tonnes in 2019-20, as per its MoU with the Coal Ministry.
In 2018-19, CIL had registered 7% growth in production at 606.89 million tonne against the target of 610 million tonne. It had recorded a 15% growth in production at 137 million tonne in the first quarter (April-June) of FY19, accounting for nearly 22% of its total production in FY19.
However, in 2019-20, the production has been almost flat or even slightly negative in April and May, at around 92 million tonne, on account of slowdown in overburden removal (OBR – process of removal of topsoil to expose the coal seams and extract minerals mainly in opencast mines) due to delay in finalisation of contracts.Though the state-owned miner is hopeful of covering the lost ground in June.
As over 90% of Coal India’s production comes from opencast mines and therefore any slowdown in overburden removal affects production growth as new seams may not be exposed.
Apart from the slowdown in overburden removal, the various subsidiaries of CIL, such as Mahanadi Coalfields (MCL), Central Coalfields (CCL) and Bharat Coking Coal Ltd (BCCL) have been plagued with law and order, land and weather-related issues, impacting production.
Commerce and industry minister Piyush Goyal asked industry and exports bodies to stop relying on “crutches of subsidies and grants from the central government” and try to improve competitiveness and self-reliance. He also added that the time for setting incremental export growth targets is over.
This comment from the minister came at a time when the country is targeting more export in line with US and exporters are complaining about logistics costs, inflexible labour norms and strong rupee under the country’s managed floating exchange rate system.