India Cements is accelerating its efforts to reduce production costs. The Chennai-headquartered cement maker has been battling with high production costs, as most of its factories are vintage units. “The company is seriously pursuing its plan to monetise some of the non-core assets for improving liquidity and operating performance as well as meeting some of the minimum capital expenditure,” said N Srinivasan, Vice-Chairman and Managing Director of India Cements, at the company’s 77th annual general meeting.
The company has now taken up programs to address the rise in costs by refurbishing its units. It has now engaged global consulting firm Boston Consulting Group to study the operations at three of its plants in Andhra Pradesh and Telangana, and recommend measures to improve efficiency in their operations.
The company has 8 cement factories spread across Tamil Nadu, Andhra Pradesh, Telangana, Rajasthan, and Maharashtra. It has already engaged FLSmith and ThyssenKrupp Industries to undertake a detailed study on the operating parameters of some of its other units for refurbishment/modernisation to bring them on par with that of state-of-the-art modern cement factories.
The new cement mill, replacing the old cement mill, at Sankar Nagar is expected to be commissioned during this quarter. Also, the waste heat recovery system at Chilamkur in Andhra Pradesh is expected to be completed in the current year. These projects are expected to help cut variable costs going forward.
India Cements will be selling about 74 acres of land at villages Kantakapalle and Chinnipalem, Mandal Kothavalasa, District Vizianagram, Andhra Pradesh, to Ultratech for ?70 crore (excluding taxes, stamp duty and registration charges).
It has been planning to raise funds to meet working capital, repayment of some debt, and Capex in the near term. The company reported a positive EBIDTA in the first quarter of this fiscal, after posting negative EBIDTA for three consecutive quarters.
