To maintain our industry leading performance benchmarks, we are ramping up our capacity utilisation, enhancing our brand equity
Please share your thoughts on how RMC can contribute to India's ambitious target of achieving a $5 trillion economy by 2025
One of the biggest contributions of our nation’s economy comes from the construction industry where concrete plays a very important part. Ready Mix Concrete (RMC) is crucial for speedy construction with consistent quality assurance. In India, RMC accounts for 20 percent of construction consumption, whereas in developing nations it is as high as 75 percent. I am optimistic that India will soon bridge this gap, boosting the country’s growth and development.
Discuss the role of RMC in India's infrastructure development initiatives
Multinational Companies and Project Management Consultants are driving the modernisation of construction practices. This demands consistent quality and development of special products like Self-Compacting concrete, Temperature-Controlled concrete, Decorative concrete, and Ultra-High Performance concrete which can be made only by the Ready Mix Concrete industry. Also, compared to traditional Site Mix Concrete, RMC offers manufacturing and application speeds that are 8 to 10 times faster. This helps in timely completion of projects, preventing any cost escalations in both private and government sector infrastructure projects.
Take us through the recently introduced RMC portfolios and explain how they facilitate the faster completion of infrastructure projects
Being one of India’s leading cement manufacturers, Shree Cement plays an important role in India’s Growth story. Foraying into RMC business will propel us forward in our journey to becoming a multi-product company poised to play a significant role in shaping our country’s vision of having world class infrastructure across sectors like airports, ports, metro, roads, railways etc. Our product, Bangur Concrete, will introduce a range of specialised concrete solutions to cater to the diverse applications and structural demands of our customers. Our portfolio will include Self-Compacting concrete, Temperature-Controlled concrete, Decorative concrete, Fibre enforced concrete, Green concrete and High performance concrete. Our application-specific concrete solutions will help in timely completion of all projects, ensuring durable structures for every application in construction projects of all kinds.
Given the dominance of unorganized players in the RMC market, please outline Shree Cement's strategy to increase its market share
Bangur Concrete is focused on setting up its own Capex state-of-the-art manufacturing units equipped with modern machinery and technological proficiency, backed up by world class cement manufacturing units. These units will be equipped to manufacture all types of special concrete by providing advanced testing facilities, experienced industry’s best technical manpower and digitised solutions. One of our USPs will be our commitment to providing sustainable, environmentally friendly solutions to our customers. We will achieve this by ensuring that our plants are environmentally friendly and reducing carbon footprint through optimised mix designs and use of best mineral admixtures.
Please share the challenges RMC manufacturers face while executing realty projects in metros
Major challenges that we face include traffic restrictions, space constraints for setting up plants in proximity to the city, changing construction schedules (such as night pours), meeting strict supply window and navigating changing government norms like NGT ban in Delhi NCR. Additionally, the longer distance between RMC plants and major development areas due to unavailability of industrial lands poses another challenge. However, we have an excellent team is place who are well positioned to find sustainable and logical solutions to challenges that come our way.
What are the steps taken by Shree Cement to address the shortage of skilled manpower in the RMC industry?
We are building an agile workforce capable of adapting to changing ecosystem while nurturing their overall growth to contribute to both organisational and personal progress. We are hiring sales and technical people from campuses directly and grooming them for higher positions through on-the-job training. Additionally, we will provide training to ITI and Diploma holders to develop their skills, sourced from resources like the Ready Mixed Concrete Manufacturers' Association (RMCMA), OEMs and other cement and concrete associations. We also have training programmes for employees throughout the year, covering technical upskilling as well as behavioural training.
Share your views on existing government policies and regulations affecting the RMC sector and suggest any necessary tweaks
The Government allocated budget for critical infrastructure such as housing and roads is a positive step. It is pushing the Indian cement industry to grow at a rapid pace. Looking ahead, there are a few aspects that the Government may like to consider in the upcoming Budget: Cement and concrete being commodities, they could be in the lower GST slab; Establishing dedicated industrial hubs for RMC manufacturing units near development areas as this is a perishable product; Implementing common environmentally-friendly policies for both organised and unorganised players of the industry to ensure a level playing field; and for RMC sustenance and viability, government could grant all permissions for at least 10 years.
How has Shree Cement's performance over the last three years?
Over the last three fiscals, Shree Cement has reinforced its position as one of the fastest growing, sustainable and low-cost cement producers in the country. Since FY 21, cement sales have grown at a CAGR of 9 percent reaching 32 million tons in FY23. Consequently, revenue from operations have grown at 15 percent CAGR crossing INR 16,500 crore in FY23. Despite facing external challenges from the pandemic and global disruptions between 2020-2023, which created cost pressures in the industry, Shree Cement was able to maintain a healthy EBITDA margin of over 20%. In the past three years, the company has added ~10 MTPA in cement capacity. During this period, the company has continued to focus its effort on green energy and has increased its green power capacity from 244 MW to 475 MW, which now accounts for 57 percent of its total power generation capacity). Being an energy conscious company, consistent efforts have also been made to reduce power consumption in manufacturing, decreasing it from 69 KWh per ton to 65 KWh per ton of cement produced.
What are your expansion strategies for the fiscal year 2024-25? Are there plans to launch new products or is a Greenfield or Brownfield facility in the offing?
Shree Cement inaugurated its new integrated plant at Dachepalli village, Guntur, Andhra Pradesh, earlier this month. This plant has cement production capacity of 3 MTPA. With the addition of this plant, our overall manufacturing capacity has now reached 56.4 MTPA, further solidifying our position as a key player in the cement industry. We are on-track to meet our domestic capacity expansion goal of reaching 80 million tons by 2028,by when 13 more cement plants will be operational. In FY25 itself, Shree Cement will add about 15 MTPA of cement capacity at various locations in Andhra Pradesh, Rajasthan and Uttar Pradesh and Chhattisgarh. These expansions align with our expectation of sustained growth in Indian cement demand for the foreseeable future, driven by public and private CAPEX in Infrastructure, real estate and housing.
On the RMC front, Shree Cement has recently inaugurated the first greenfield plant in Hyderabad. It has a capacity of 90 cubic meters per hour. Additionally, Shree Cement had acquired five operational plants of StarCrete LLP in Mumbai last month, bringing the company's combined RMC capacity to 512 cubic meters per hour. Driven by our core philosophy of ‘Build Smart’, Shree Cement is firmly on track to become a modern and green building material company. In order to maintain our industry leading performance benchmarks, we are ramping up our capacity utilisation, enhancing our brand equity, raising cost efficiency and further stepping up our R&D efforts. This strategic approach ensures we continue to set new standards of excellence in the industry.
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