Infrastructure sector is having a roller coaster ride. How has your organization performed in the last three years?
Prism Johnson’s cement division has reported good numbers for last three years. We had volume CAGR of 8 percent and EBITDA CAGR of 31 percent. Each year we had seen increase in EBITDA per ton despite cost pressure. Better realizations and higher utilization levels aided improved performance. In FY19, our Satna cluster’s utilization levels were at 90 percent, perhaps the best amongst the country. However, in the current fiscal (H1FY20), overall volumes have been down 6-7 percent due to heavy monsoons and overall economic slowdown.
Not only the products (cement) but the manufacturing processes are also going green. Coal is slowly being replaced. What are the efforts you are taking on this front?
Coal is one of the prime sources of greenhouse gas emissions. We, as a responsible organization, have taken various steps to contribute to clean environment. In order to reduce the coal in cement manufacturing process we are substituting it with pet coke, carbon powder and plastic wastes. We have also done modification in pyro process burning to suit alternative fuels. To minimise environmental impact we have adopted new technologies like SNCR, Low Nox kiln burner and automated water fog cannons to reduce fugitive emissions. We encourage the use of bio-diesel in our transportation equipment. We have replaced conventional motors with latest IE4 motors and LED lights have been installed in the entire premises for better energy efficiency. In order to check for the quality of products we manufacture, we have fully developed state-of-the-art Quality Assurance lab in our facility.
Limestone mining comes with its own set of problems. The foremost being loss of forest cover, depletion of natural flora and fauna, displacement of human settlements among others. How are you ensuring environment management, resource conservation and resettlement and rehabilitations of forest dwellers?
The land where mining has been done or is being proposed is open scrub where the exposure of limestone and other rocks prohibit regular vegetation growth. Some of the lands are agricultural where, as it is, there are very few trees. In fact, when we mine out the area and rehabilitate it, the flora is far richer than it was previously. In rehabilitation of mined out lands, we use the local species.
We do not indulge in displacement of human settlements. We are enhancing the biodiversity in the mined out and peripheral areas. 4,50,000 saplings have survived and are adorning our plant, colony, mines areas and peripheral areas. Nearly 14,000 villagers benefitted from distribution of fruit saplings. As far as resource conservation is concerned, we have adopted best in class technology to use best blende for limestone consumption by using sweetener grade limestone and fuel. Suitable changes have been made in the plant process to conserve our resources. We are also running an exploration programme to re-map the entire area considering new technology/fuel mix upgrade. In our recent exploration we have uncovered the existence of second zone of mineralization which was previously not known. We have not taken any forest areas in our mining leases so there are no effected forest dwellers.
Media - be it print, broadcast or digital has become a battleground to grab the maximum market share. Please take us through your branding and marketing strategies?
Being a cluster player predominantly operating in the states of UP, MP and Bihar we invest majorly in BTL media rather than ATL media. Majority of our marketing spends are made towards BTL and digital campaigns. We take our brands closer to our consumers through periodic "brand activation campaigns". As far as ATL media is concerned, our major spends are on Radio campaigns. Radio becomes a viable medium for us as we do targeted brand campaigns across all our operating markets with important radio channels. We ensure brand visibility through outdoor media. We have billboards and hoarding properties across our cluster markets in strategic locations at market places, bus stations, railway stations and airports. We do invest in transit media like bus branding, train branding & boat branding.
Dealers and distributors are the vital link between manufacturers and the end-users for the success of the products. Please take us through your dealer’s network and the various education and retention schemes you conduct for them?
Our distribution network comprises of 3200 authorised dealers and 6000 authorised retailers spread across the three states of UP, MP and Bihar. On daily basis company officers visit minimum of 10 authorised dealers/retailers where they engage with them on subjects such as cement/construction/building durability aspect, good construction practices, selection of other construction ingredients, certified method of concrete & mortar preparation.
We organize around 12 thousand concrete expert camps at authorised dealers/retailers shops which are being manned by qualified civil engineers of the company. In these camps we interact with end users in presence of shop owners and enlighten them on how to identify & use standard construction raw materials apart from cement, how to prepare good concrete for better performance and the importance of curing. Around 80 thousand masons and 25 thousand contractors are being trained annually through various training workshops with the help of our mobile testing vans involving the dealers & retailers to help them generate secondary sales through these influencers. More than one lakhs construction sites are being visited by company’s qualified civil engineers annually to propagate the good construction practices as well as generated secondary sales for the network.
What are your growth plans for your organization for the next three years? Is there any product launch, expansions or new plant in the offing?
Improved performance over the last few years has resulted in debt reduction and improvement in financial ratios. We have lined up few capexes, the payback period are quite attractive. We have already commissioned 7.5MW of solar power and have plans to commission total of 25MW in the current year. Our waste heat recovery system is on schedule and is expected to be commissioned next year. We are planning upgradation of Unit-II clinkerisation section for better efficiency, upgradation of Unit-I Pyro section clinker cooler for higher heat recuperation efficiency and erection and commissioning of additional clinker silo to impact usage factor and improve quality. We are exploring fly ash transportation through railways. Our medium to long term expansion plans include setting up grinding unit in Satna cluster, where we currently sell cement and a greenfield unit in Kurnool, Andhra Pradesh.
What are the challenges facing the cement industry?
The industry is currently facing challenges such as need of limestone and sand alternatives to conserve natural resources and waters reserves; measures to reduce the water demand per unit of material manufactured; to dedicate more area for afforestation; Government policies and infrastructure on use of green power. Identification of waste heat recovery based power generation as green initiative.
@EPC World Media